East Oregonian : E.O. (Pendleton, OR) 1888-current, 1908-02-10

Washington, Feb. 10.-The reply Of
Senator Aldrich Of Rhode Island to
critics OF his banking and currency
bill, introduced by him as a measure
to provide relief in time of financial
stress by allowing the national banks
to issue emergency currency on cer-
tain approved securities and guaran-
teed by the government, was made to-
day.
1t excited widespread interest be-
cause the bill is supposed to have
the best opportunity of passing, of the
number of bills offered this session.
Many financial critics declare that the
| bill affords no substantial relief AL
drich reviews the situation in an able
style.
Senator Aldrich spoke in the sem
ate today in. defense and explanation
Of his banking bill. He reviewed the
panic Of 1907. 1t was not a currency
panic, in the true sense of the word,
for the United States currency, in
characj,.r. is beyond question.
The amount OF money in circulation
at that time in the hands of the peo-
pie outside of the banks and treasury
was $19.36 per capita, a much larger
per capita than was held by the peo-
pie of any other commercial country
in the world. except France, where
conditions are entirely different.
Under ordinary conditions the
volume of currency could be fairly
criticised as excessive and certainly
adequate to meet the normal de-
mands. But no provision for an
emergency which occurs more or less
frequently in every country and which
we now see must be provided for.
at is impossible to estimate the
losses inflicted by the suspension Of
payment by the banks in the recent
disturbance. There was financial en-
barrassment on every hand, thousands
were thrown out of employment and
the wages of employees were reduced.
"Of the five expedients adopted to
meet the emergency the use of clear
ing house certificates was unqustion-
ably the most effective.
This was the eighth time their
use has been beneficial. at times pre-
venting serious disaster. but they re-
suited this time in such disarrange-
ment of the exchanges as to make it
doubtful whether the disadvantages
were not greater than the benefits.
1.-The great losses the people of the
country suffered through the partial
breakdown of our credit system and
which the abnormal increase in vol
ume of money legal and Illegal, fall
ed to avert, should lead congress Sc
riously to consider whether it is pos
sible that legislation will prevent |
recurrence.
If the panic should be repeated
the methods of relief used in 1907
should not be available, the treasury
would not be in condition to come to
the relief, il would be impossible to
increase the national bank notes on
states bonds and may not be able to
command the large important ones,
he gold suspension of bank payments
with the resultant strain on the credit
If the country would not be tolerated
again.
mo one can predict what the finan-
Some urge the entire revision of our
system, some the establish
nent of central bank of issue.
Personally, I think the states in
ime will adopt the latter system, but
n the immediate future it is out of
he question. Therefore, the entire
finance committee agreed upon de-
nand for the issue of emergency
totes.
"The minority, favored the United
states notes. The majority felt this
would establish a dangerous prece-
lent and the approval of their issue
wen for temporary purposes would
cad ultimately to demand for the
ontinual enlargement whenever a
easonable pretext would be found.
'It was believed, since national !
'ank notes with their convertability /
by the government, have /
he confidence of the American peo- {
lie, it would be prudence to use this $
orm of currency. /
Germany. England and Austro- c
follow this plan in gen
raj way. The committee felt that 1
precedent was the safest /
0 follow {
"There the imperial bank is directly q
nder the control of the government I
nd has the authority to issue $11s,- u