The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1908-02-21
Entered at Richmond, Ind, Postofice
As Second Glass Mail Matter.
ALDRicH BILL CONDEMNED.

mond, who have seen fit to ,criticise
us for our opposition to The Aldrich
currency bill now before congress, we
reprint the following editorial from
the New York Press. Half a glance
at this editorial will be sufficient to
prove that even in New York. the
home of the greatest gambling hell in
the world, Wall street, the prevailing
sentiment as expressed both by the
newspapers and by the honest bank
ars of the state, is against any and all
currency legislation of the Aldrich-
Wall street kind:
What support the Aldrich bill has
from the public, If it has any, ought
10 be advertised as a curiO The New
York State Bankers association is GER
tainly representative of general finan.
ciaI institutions. Banks within our
boundaries experienced SO severe
trial last fall that they cannot be in
different to the dangers of the pres
ent currency system. 1t cannot be
possible that they would not welcome
reform and relief il they saw the pos
sibility of such in the Aldrich meas
ure. Yet the State Association con-
dennis that proposed legislation incon-
tinently. This resolution expresses
its opinion:
That the bankers of the State of
New York unequivocally disapprovc
rig;n nf he 1Jrfo
they do not approve a bond-secu!ed
emergency currency; that they de-
mand an elastic currency based on
bank assets, as provided in the meas
ure of the Currency Commission OF
the American Bankers ASSOCIATE ton.
The president of the state associa-
ton explains In detail that the Aid
rich scheme, with it's currency based
on liabilities and not assets. would
hurt rather than help a strained sit
uation, "for to afford relief banks who
issue this currency must necessarily
borrow bonds on which the issue is
based; for to buy the necessary bonds
out of their resources banks would
have their capacity toward relief of
the business community lessened rath-
er than increased by the process. In
other words, 1t would cost, say. 500
for each $75 of currencv issued un-
der the conditions of tae bin, He
makes clear what is needed:
The currency that this association
should demand is an emergency cur
rency, one elastic. based on assets;
and it is said by the best authorities
that the best asset on a solvent bank
is its commercial paper. An elastic
currency is what is wanted. one re-
gulated by the demands of business,
to be issued when the manufacturers
want to borrow and to be retired when
the merchant pays for his goods. This
applies equally to the moving OF the
crops, which. by the way, generally
takes from s50.0Oo.oOo to $4,000, 900
out of New York city, reducing its
available credit at the very time when
the legitimate demand for loans is in
creased.
Business interests are in accord
with the bankers. as is shown by the
action of the Merchants Association,
which accepts the report of its COM
mfttee on banking i'll condemnation OF
the Aldrich measure. Among other
things this report says:
They regard as essentially unsound
the principles embodied therein, that
a currency should be based upon fixed
securities OF any description. The
note issues, as we'll as the deposits of
a bank, are obligations payable on
demand. and the bank should hold as
security against such liabilities moth
ing but quick assets, such as actual
cash, secured notes payable on de-
mand, or commercial paper liquidat-
ing itself at par at the end of short
ton for bank of deposit or issue to
invest assets held against demand OBJ
legations in long-term notes, bonds or
mortgages, the conversion of which
into cash in times of stringency can
be accomplished only at sacrifice of
the principal. il at all
And 1t is the unanimous opinion of
the committee Of the Merchants AS
ISOLATION that, rather than accept
legislation Of the character of the AL
drich bill. which We feel in it's ulti-
Aidec iSSultS would De most QiSaS-
trous to the commercial interests of
the country, it would be preferable to
have no legislation at all, in spite of
the manifest niece ssity of some relief
to the present intolerable situation. -
The only currency reform that will
lessen the evils and remove the dang
er OF the present system is one that
will assure more money for more bus
iness--pre serving the normal proror-
tions--with an automatic shrinkage
of the excess currency when business
proportionately subsidies. or when it
naturally hQuidates. When this cur.
rency is dependent upon the business
itself ii will move up and down with
the rise and fall of the latter volume
rs reasonably as when lha farmer
takes ten sacks for the potatoes that
will fill that number, twenty if there
is twice the quantity. and ten thous.
and If there are enough potatoes for
them, retiring the sacks from use a.
his crop falls. About the Aldrich bill
there is absolutely nothing to give
such result. II it is OF any use It must
be to stock market speculation. Con
nrQSS ought m ha abfa IN CO -. - :,