New-York tribune., 1908-02-11


far the anthorzaton Of additional notes to be used
opinion to the character of general legislation
to be enacted. and the further and more significant
opinion on any general special plan, led the
o possse M % tine to the .3n that 1T Is
reform of our entire currency legislation.
II ibex was ad safer to follow in the form Of sgs,atiSn
to provide @ to meet or
under different restrictions and conditions from
those imposed on ordinary issues
of Germany which IS under the direct control Of
Bs n to an bH sa
a further issue Is @ equal to the nc mt
aSsrase interest charge in Germany being than
notes specie must be held to the extent Of one-thrd
S the 're ac 's In ad
peeslly during the last year the prIyegs of i'm n
The plan for additional notes which the COM
tally the plan Of the Imperial Bank Of Gegmany my
= change in the rate Of taxation IN its general as
German laW awe Of f ISIS q followed the English bank act
OF 1874 but amending and improving that act, how
that have explained.
FINANCE COMMITTEES PROBLEM
The problem before the committee was to find
some simple method Of remedy and RreUent4n in
the existing system and that could be provided
tem of issue and q redempto which existed
for forty years. is continued by the terms OF this
only and not TO be retained in general crculaten
and We have tbs most not pneeded The
notes to be issued nominally national bank
of the United States. issued through the agencies
The remedy We provide is simple, prompt and
efficient. At any time within forty.eght hours, If
monev can be put into the Channels Of trade to
ellay public excitement and to meet extraordinary
The committee believes that this great fund,
bbaers e an men al Of the coun5ry viii
have strong tendency to prevent financial crises
and to preserve public and private credit at nome
In periods of distrust large numbers Of people
shown that at such a time the strongest element
the II knoWedse aha remedy exists which can and
sfenes @ be pr hs and nd is like e Creation Of
ample water supply with effective apparatus to
The emergency issue propose should enable
the solvent banks Of the eountry to meet at az III
all unusual but legitimate business demands 1t
ther M S humiiiating s @ Concessions I % Of general nso
vency It will be used in time Of trouble TO take
tifcates. it will render the use of illegal or
There should be no misunderstanding as TO the
sole controlling purpose of this bill 1t proposes
the means Of reiieTing panic conditions We do
not claim that it is universal @ panscea aI for th a
means OF accomplishing by legal methods that
complish by illegal and destructive methods. to
the great loss of the country It makes no pre-,
tries no, new experiment with our currency 1t
surr0anaS notes to 6e rSe4 10 'boS oE in s 0
The measure we offer can be supported without
nanK OF viii or not I nterfere With the
or of 1n-- y9l1 n
future.
REPLIES TO CRITICISM.
I will now ask your attention to certain specific
eisms more or less serious in their character but
fu ttenton The e first Of these is that the issue Of
notes proposed would be Improbable for the banks,
snq m Is tf ana hs rase T1 l o ue m w
be made Of the authority to issue additional notes
Public discussion of the bill has turned largely
Was WRGh to s Ignoring
that the question OF the soundness, character
IS W vitaily interested I must confess that. in CON
eeis tss ss 5 0 was as' to povde ad
ditional profits to the banks The banks are not not
conrToes Of she carrency Shows that the iv
dends paid by the national al, banks for the the sixteen m
l cent per snnnI Of the capital and T Surplus US
1901 the average annual rate Of dividend was but
little over per cent ,o,.,.. .p.. .ho ,,,or-
wheing majority Of the naii9nal banks whteh
accorded valuable privileges, recognizing
their obligations fiscal agents OF the United
States will cheerfIlly cooperate in carrying out
eny measure adopted by Congress as a means or
relief without reference whether their action
in This regard would add greatly to their profits.
In times Of public peril. when great interests were
at stake these banks have given the strongest pos
sfbe evidence of their patriotism and unselshness
I decline TO believe that the criticisms under con-
sideration reflects the views OF thoughtful oank
managers. They too keeny appreciate the value or
public confidence - .
AS a matter of fact, the effective operation of
the htu proposed by the committee would not re-
slIlt in loss to the banks In time Of stress or at
any other time. We have right to assume that
every well managed bank viii hold portion OF its
invested reserves in class Of securities readily
convertible into cash. If a bank holds the bonds
designated in the bill there could be no loss on the
note issues authorized unless the rate of interest
CHI the bank 10 its customers was less
than per cent If the bank rate was less than
Der cent no additional notes would be required or
Issued
erally do not have, and would not purchase and
hold securities of the class which the Secretary
Of the Treasury is authorized to accept under the
r,rovisfons of the bill The committee were OF the
6ninjon that they would deserve general condemna-
ffon if they did not require, basis of the note
issue contemplated, the very best available Sc
curities.