The free lance. (Fredericksburg, Va.) 1885-1926, 1908-03-05
The CURRENCY BILL
Senators McCumber and New
lands Speak On Measure.
OPPOSE EMERGENCY MONEY
During Debate Senator Carter said:
There Ought to Be a Clear Way
Open From the Back Door Of the
Failed Bank to the Penitentiary.-

Washington. March 4-Senators
McCumber. OF North Dakota. and
Newlands. OF Nevada. spoke at length
upon the Aldrich currency bill.
Mr.. McCumber was opposed TO any
expansion OF the currency. except to
save the country from catastrophe.
he said. He referred to the impor
tation of 500 O00. 900 gold during The
panic. and declared that IL had not re
established the old conditions. II thai.
amount Of gold had not met the con.
clifton. he had no confidence that the
proposed issue of $500 000. 600 of em-
Urgency currency could do Il.
The expansion OF the currency he
said. does not expand the confidence
OF the public in American securities. q"
The pending bill. he added. was not
put forth with the claim that il would
be tonic for industrial conditions.
but merely as a means Of relief in
case OF runs on banks That" he
insisted. lis the only purpose in the
world that could be assigned as a
reason for giving support to it,
Previous panics had been brought on
by the people but in the case OF the
recent panic II had been brought on
by the banks. he declared 1t Is the
activity and not the bulk Of money
that pays debts" declared Mr Nc
Cumher. u am not generally in favor
OF any elasticity in our currency. as
! believe such elasticity is as pernic
ious and almost as bad as an elastic
conscience But I can see that n our
industrial conditions are not changed
there will arise in the future a condi
tion again that will demand elasticity
10 prevent great catastrophe For
that reason and because OF the uni
versai demand for an elastic currency
] am willing TO vote for this bill"
He favored government guaran
tee OF deposits In national banks
A coiloauy with Senator Carter fol
lowed. In the course Of which Mr. Car
ter. commenting on falling banks
said
There ought 70 be n clear wav open
from the back door o. the failed bank
10 the penitentiary"
Declaring that currency legislation
should be directed more to the Sc
curity OF depositors than 10 the ere
alton Of an emergency currency. Sens.
tor Newlands gave a careful analysis
OF certain features OF the pending bill
The only way 20 secure denosi
tors" he said ~is by ample capital
and Sufficient reserves The capitai
and the reserve together constitute
the security OF the depositors end
should in all cases amount 20 between
80 and ~ per cent OF the deposits
The capital which should amount 70
at least Is per cent OF the deposits.
should he invested in the interest
bearing securities. and the reserve
which should amount to at least %
or - per cent. should be kept In cash
In the vaults OF each hank and not
entrusted 10 other banks
Viewing the state and the national
banks as one system. Mr. Newlanls
contended Il was obvious that the
amount OF reserves kept in the banks
was insufficient and would have 70 he
gradually increased He urged that
the nation should gradually retire the
various forms OF United States notes.
such as silver certificates. gold Ger
tihcates and greenbacks and substi |
tute one form OF United States notes. |
and thai the coin now backing the |
silver certificates and the gold certih |
Gates should be gradually placed in |
the redemption fund OF the treasury as
security for this general form OF
United States notes. The United |
States treasury. under existing condi. |
lions. was practically engaged In |
banking Fifty per cent gold reserve |
was considered sufficient for tho note |
Issue Of bank OF Issue. There should /
be no reason. he confined. why the |
United States should not be able IN /
periods OF emergency to increase the
Issue Of notes upon this gold and sill |
yer coin In its vaults to meet any
emergency. -