Evening journal., 1908-03-06

Interest rate paid on savings deposits
This would be to the steadt and peruia-
nent injury OF 5000. 900 deposAofs who cam
not a1ord the loss
The fact that the law-rnade extra pro-
fits would not go into The pubic trsas
ury would seem a sufficient anNer 70 bo
Senator's plea for the use Of ralf0ad
bonds because It would financially hen-
eft these corporations They have bot
treated the public with excessive consid-
GRAFTON as to its legal rights. They even
resist the suggestion for an Official np-
praisal OF their properties that ust
basis for computing lawful rates nay
he ascertalned For these reasons ine
Senator's plea occasions surprise.
Substitute For Aldreh Eii.
Until removable causes OF panlcs are
banished by law. panics win frequently
visit us. If the purpose Of this $500
100000 emergency currency is soiely 70
| protect the banks against panics, can
We not get IL and also avoid the evil
features Of the Aldrich bill? Consider
alton Of a substitute for that bin Is
asked. 1t Is substantially the plan Of
the Aldrich bill. with two exceptions.
First. eliminate the nse Of railroad
bonds. Second, allow the treasury to
issue emergency currency to any bank.
trust company OF individual depositing
the required State or municipal bonds
and paying the high tax. in amount to
suit Willingness 20 pay the per cent
tax, plus say per cent. for use Of the
bonds temporarily borrowed for the
purpose, a total OF 10 per cent. will be
conclusive evidence that a currency
emergency exists and that the money
cannot be found elsewhere for less than
10 pr cent.
Great. sound and prosperous Indus
tries were compelled to close down in
the recent panic. Establishments
crowded with profitable orders for
their products. Hundreds Of thousands
OF willing and honest workmen were
plunged into idleness and their help
less wives and children into narrowing
fear and distress Solvent corporations
were even forced into bankruptcy The
distinguished senator in his speech did
not overdraw the picture Of the calam-
ity. And all this because panic, natural
or artificial. frightened banks into re-
fusing to give up money on deposit or
TO supply currency needed to meet pay
rolls. If this substitute for the Aidrich
happen again. The Industry would bor-
row municipal bonds and obtain from
the public treasury sufficient emei-
gency currency at a total cost OF 10 per
cent. until the stringeucy Is over. This
will keep the industry going and its
worlSmen employed IL he had to wait
for his bank to take out emergency
/. currency he would fall The bank can
: to half It's capital stock ana sur
plus. This Is an Insignificant
/. amount IN proportion to the total
deposits. II depositors are &C.
mandlng payment, or the bank fears
they may do so. 1t will not give up its
emergency currency to relieve the dis
tress OF Industries. II is everybody
for himself IN a panic. The only way
to provide certain relief for industries
pressed for currency Is to allow them
to apply to the treasury direct, inde-
pendent OF the banks Why not consider
the rights Of industry. and OF millions
OF toilers and their families instead OF
the national banks exclusively2 This
4 kind of emergency fund would prove TO
o be a national blessing
"Peope Can't Be Trusted"
!, with the obnoxious monopoly feat
Il ure thus eliminated, there would be
81 real elasticity In this emergency cur
\ reucy Its volume would automati-
, caly increase and decrease In response
4 TO the natural law OF supp and de-
2 mand. The banks could not justly
Z complain Of the competition, for when
they were able and willing to loan the
b money on the same perfect security at
z less than 10 per cent the emergency
y currency would Immediately contract
and return to the treasury II would
remain there until some new emer-
/, gency again forced interest rates up to
10 per cent. Il might not even be
necessary 20 limit the amount Of emer-
, gency currency which the treasury
could Issue on this plan. The high tax
would prevent the money becoming
part Of the currency depended on for
p regular use. IL would, as the senator
q says, be used in emergencies only.
The recent panic proved that the
P people and their Industries need an
- available emergency currency that they
8 can get al direct simply TO protect
, lhem against the bauks II Is quite
e ns important to protect them against
* insntehcd banks as 90 protect the
4 hauks against frightened depusitors. II
ihs plan Is adopted, the rate on call
g. onna wili never again go above 10
y uer cent Dor ihIs reason we must
, expect Wall Street TO oppose this SUBJ
stiNte
ii u is Insisted that national banks
must m1nopoli2e the issue. and that
rairoad bonds boz used. win not the
Impression ahtain ftef the rea object
NOT merely io creatG m emergency
y currency to GUARD against panics? WIN
tnis he demanded even TO the extent
3 1f failure 90 provide amy relief at an
s. rhsn the reenonsihllity must rest where
e belongs
THE senator says there are more than
81 1000 000.00D OF state and municipal
q bonds outstanding and that the vol
me VII increase RAPIDLY Surely this
enough To secure 100000 900
emergency currency on the basis OF
MnctN Der cent Use OF railroad bonds.
h HIS own showing. is unnecessary.
AS municipal bonds are now held
h'e1v by savings banks. the profit
from any enhancement Of va'u would
n widely distributed between s,000.-
100 depositors. on an future issues
he public would benefit through lower
y Interest rates This would encourage
public Improvements.
j. What objection can be raised to this
substitute plan? But one can be urg-
d ed This was stated by the distin-
10 guished senator IN his speech. as fol-