Evening star. [volume] (Washington, D.C.) 1854-1972, 1908-04-15
CHAIRMAN HEPBURN's VIEW
At Loss to Know Why Bankers Ad-
vice Should Be Set Aside.
TWO DANGEROUS PROPOSITIONS
Added to Bill in Way Of Amend.
ment Contained in Sections
8 and IL.

and currency in opposition to the Aldrich
currency bill. Those members of the cur
rency commission in attendance were A.
b. Hepburn. chairman, president of the
Chase National Bank. New York: James
b. Forgan. vice chairman. president of
the First National Bank. Chicago: Festus
j. Wade president of the Mercantile Trust
Company. ST. Louis; Joseph T. Talbert.
vice president of the Commercial National
Bank. Chicago: Charles H. Huttig. presi-
dent of the Third National Bank. ST.
Louis; sJohn Perrin, president OF tlle
American National Bank. Indianapolis:
Solomon Wexler. vice president of the
Whitney Central National Bank. New
Orleans: Robert Wardrop. president of the
Peoples National Bank. Pittsburg; Ar
thur Reynolds, president of the First Ma
tionaf Bank Kansas City: Joseph A.
McCord. vice president Of the Third Ma
tional Bank. Atlanta: John l.. Hamilton,
vice president of Hamilton & Cunning
ham, Hoopeston. H.: Frederick E. Farms
worth. secretary 8 Nassau and IL Pine
streets. New York. and W. V. Cox. presi-
dent of the Second National Bank of this
city.
Chairman Hepburn's Statement.
In his statement before the committee
Chairman Hepburn of the currency COM
mission said in part:
The currency commission of the Amer
lean Bankers Association, at meeting
held In Chicago January IS. 1908. placed
itself on record as opposed to the Aldrich
bill as it had then been introduced in the
Senate, giving its reasons therefor in
report which was placed before this hon.
orable committee at the time. The bill
was stated to be impractfcable. unwise
and financially unsound.
THE bill. as it was finally passed in the
Senate varies but little from the original
bill so far as the proposed issue of emer-
sency currency is concerned. Railroad
bonds have been eliminated, and state.
municipal. governments of Porto Rico and
the Philippine Islands and city of Manila
bonds can alone be used as security for
the proposed additional bank issue.
Banks can take out notes for 30 per cent
of the market value Of such bonds in
stead of % per cent. as originally pro-
posed. and the tax on such notes. after
they have been in circulation four months.
10 raised from one-hah of one per cent
per month to three-quarters of one per
cent. These and the other slight changes
affecting the working and administration
OF the measure make no difference in the
principle on which the proposed emer-
gency circulation is based, and the meas
ure itself il as futile as it was before
from a practical standpoint.
After mature elaboration and having
fnents in favor of the bill brought out in
the debate in the Senate and in current
literature on the subject the commission
still adlneres unanimously to the adverse
conclusions formerly arrived at and fully
expressed and embodied in the report
above mentioned.
1T IL q matter Of surprise to this COM
mission. which represents the American
Bankers Association. that the author OF
the bill should force It through the Sen
ate. admitting. as he did in debate. that
he knows Of no bank or bank man who
il in favor Of the BILL and that the banks
throughout the country are against it,
Why Should Bankers' Wishes Be Set
AsideP
I'VE are at a loss to know what the
bankers of the country have done that
their advice should be set aside. their
Judgment ignored and their wishes OPP
posed in connection with legislation de
rectly affecting the business In which
they are engaged. Especially SO as they
public and are fully assured that in any
legislation affecting the circulation me-
dunn their interests and those OF the
public are Identical, for what is ultimately
best for the community Is beyond all
question best for the banks.
AN effort seems to be made In pol1tical
circles to hold bankers responsible for
the failure of the banks to meet the re-
cent business emergency of the country
without resorting to clearing house GER
tificates and curtailing cash payments.
II would be as Just and as sensible to
send a captain to sea in charge OF a YES
sci known to be unseaworthy and which
he himself had condemned as such and
hold him responsible for its almost
laundering in a heavy storm. Had the
recommendations of the currency COM
mission of the American Bankers Asso-
citation. approved by the association it
SELF adopted and with but slight varia-
ton reduced to a hill and introduced into
the House of Representatives by the
chairman of this honorable committee a
year ago. been then enacted into law it
is our belief that the banks of this coun-
try would have withstood the financial
pressure. as similar pressure was with
stood at the same time by the banks Of
other countries. without resorting to the
humiliating methods which were forced
upon them entirely In consequence of the
defects Of the banking and currency sys-
TEN under which they were obliged to
conduct their business
AS bankers We claim practical
knowledge OF our business. which expert
ence alone can give. We think that with
such knowledge and experience we should
he consulted and our advice needed in
connection with any LEGISLATION affecting
the banking and curr ncy laws of the
country. We protest gainst the passage
OF such law az the Aldrich bill. when
try Is admittedly opposed to it,
Two Dangerous Propositions.
Since our consideration of the bill as
II was originally introduced into the Sem
ate two very dangerous propositions have
been added to IL by way of amendment.
One Is section s. which deals with the
location and disposition of the legal re-.
serves OF the banks and completely up.
sets existing relations between the banks
through the country and their legal re-
serve agents
Should the bill become effective the
banks outside of reserve cities would have
to withdraw from their reserve agents
two-thirds Of their legal reserve deposits
which. according to the February report
OF the controller Of the currency would
amount to $40. los. and the banks in
the reserve cities would require to with
draw one-third of their legal reserve de-
posits from the central reserve cities
which. according to the same report would
amount to &JO31364.
The proposal that q portion of the
banks legal reserve may be invested in
bonds Is an absurdity on the face of II,
Tor as soon as banks money is in
vested In any sort of security II can no
longer be counted as a part of it's re-
serve available to meet its obligations
Even government bonds have not been
considered adequate for the legal reserves
OF the banks. The effect of the measure
under consideration Ia to reduce the avail
able reserves of the banks outside OF re-
serve cities - 2-s per cent. as they can
invest that portion of their present re-
in WI,