The Washington herald., 1908-03-04
mo DILUTED MONEY
Senator McCumber Opposes
Imitation of Currency.
WOULD AMEND ALDRICH BILL
Wants Securities Based on Actual
Property and Tax High Enough to
Call in Emergency Money After
Three Months-Senator NewIands
Wants Permanent Reform.

The Aldrleh bill came in for further
criticism yesterday, Senator McCumber.
of North Dakota Rep.). and Senator New
lands, of Nevada (Dem). making ad-
dresses with the bill as a text
Mr.. MeCumber held the floor for two
hours. and the principal contention he
made was that there should be no in
flation of the currency, at any time or
for any purpose, unless the country were
facing a great catastrophe, He found
many faults in the Aldrich bill, but said
that he would vote for the measure, as
a purely emergency one, with slight
amendment
The principal slight amendment" as
deduced from the succeeding remarks OF
the Senator, consisted OF the insistence
that the currency to be created by the
bill and to be used 10 dilute" the money
Of the country, should remain IN clrcula-
ton al no time for a period 10 exceed
three months. and should be assured Of
a quick return 10 the Treasury by the
imposition of a heavy tax, the Senator
suggesting 10 per cent per annum.
He also advocated the guarantee OF
deposits by the government, insisted that
the securities upon which the emergency
circulation was to be based should repre-
sent actual property value. and that the
reserve centers which exist under the
present banking act should be abolished.
Money System Not Scientific.
The lack of a scientific money system
was. in the opinion Of the speaker. the
disgrace OF the present age. and this
criticism did not apply to the United
States alone. but to the entire world
Money, he said. was the one important
adjunct Of civilization IN which absolute
ly no progress had been made. The cir
culating medium OF the world failed to
meet the demands of justice or the de-
mands Of commerce. Science had utterly
failed either TO conceive Of a correct cur
rency system or 10 adequately patch up
the old one 20 meet advancing needs.
Such a currency system as OURS was not
ft for a civilized community.
We had, the Senator admitted, learned
what not 20 do IN this respect. hut ne
had not yet learned what 20 do TO pro
vide a currency system which, while
meeting the exigenciess of trade would
be both just and stable. He took a heavy
fall out Of the captains of industry
and leaders OF finance. declaring that
they had proven themselves incapable OF
taking the van in such matters by wan
dering far from the path OF economic
rectitude in order to amass fortunes
speedily. lie had. in fact. said the Sen
ator from North Dakota. little faith in
so-called experts in any OF the fields in
which they are usually called upon. for
the reason that while pursuing the alb
stract ramihcations OF the problem in
hand. they were too likely TO lose sight
OF the great principles involved. which
any layman of intelligence could grasp.
Safe Values Real Need.
The Speaker made a strong plea for
a return to safe standards OF value. de-
claripg that all values in this country in
the last decade had become highly ficti-
tious, securities having been inflated be-
yond the amount Of actual property upon
which they were based.
An interesting discussion Of the question
OF deposit guarantees grew out OF the
Senator's stand for such legislation. Sena-
tors Carter. Aldrich. Beveridge. Bacon.
Nelson, and Knox took part. Mr.. Nc
Cumber had declared that the average
annual loss sustained by depositors
through the failure Of national banks had
been SS00.00e during the period from 1862
TO 1903. He estimated that a tax of one
sixtleth of 1 per cent on the annual de-
posts Of national banks would assure
fund which would be sufficient to liquidate
this loss each year.
Senator Carter took the ground that the
annual loss through the failure Of hanks
to depositors, was as high as $500. COO.
which, when the failed banks were lioui
dated, had been scaled down to s. 200 600
He insisted that such a fund as Mr.. Nc
Cumber proposed would be inadeouate 10
meet such a loss as this. Mr. Aldrich
added that the losses through bank fall
ures since October last had been ss3
100000.
Mr. Knox recalled the fact that the
bank deposits IN the United States
totaled $4.0Ca 100000. and said he doubted
whether an annual fund of ONLY $500 COO
would instill into the owners of this vast
sum in the banks much confidence in the
security Of their deposits. Senator Car
ter declared that when the path between
the wildcat bank and the penitentiarv''
had been made more direct by proper
penal laws, adequate provisions for the
guarantee OF bank deposits would be de-
sirable. but unless this wers done ne
could see no wisdom in such a PROPOSE
ton.
DepOsitors' Panic, He Says.
Senator Newlands said that the recent
crisis was due TO panic on the part Of
depositors, who feared that the banks
were unsafe. Legislation should, in his
judgment. be directed more 60 the Sc
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