The Washington herald., 1908-01-08


currency prepared by Senator Aldrich,
chairman Of the Committee on Finance,
after consultation with Senate leaders.
was introduced yesterday. and referred
to the Finance Committee.
Next Tuesday the committee will take
up the bill for consideration and viii
continue 10 consider it, to the exclusion
Of other business, until an agreement is
reached TO report It to the Senate.
The basis Of the bin Is a provision that
State, city and county bonds and first
mortgage bonds OF railroad companies.
street railway bonds being excepted,
may be used as security up TO IS per
cent Of their market value Tor the issue
Of the proposed circulating notes.
These unofficial bonds ara to conform
TO certain prescribed requirements. A
tax of one-half Of one per cent per
month is imposed on the new currency
for the period that It Is in circulation.
Senators Like the Bill.
cussed informally by Republican and
Democratic members Of the Finance Com
mittee, and the Republican leaders talked
it over later with some Of the leading
Democrats in the Senate.
The Democrats have not committed
themselves in regard to the measure, and
there is a hopeful feeling among the
Republicans that they Will make little
opposition 20 H.
Senator Hansbrough. who is committed
TO the central bank scheme is the only
Republican member of the Finance Com
mittee who appears 10 be dissatisfied with
the Aldrich bill, and in view of the gen
orally favorable reception given IL by the
Republican Senators. the leaders are in
clined to believe that Ii viii go through
the Senate in a comparatively short time.
Chances Good in House.
AS far as the House is concerned the
prospects are equally good. Chairman
Fowler of the Committee on Banking
and Currency, does not like the Aldrich
BILL and in an indirect way placed him
self on record yesterday as opposed TO
any currency which is not secured oy
Government bonds. Speaker Cannon,
however, is i'm general accord with the
provisions of the measure, although he
would have preferred a progressive tax
on the proposed new circulation, in order
TO force its retirement as soon as possible.
The Aldrich measure is entitled a bin
to amend the national banking laws"
It's first section, which is entirely new.
provides that any national banking assO-
citation which has circulating notes out
standing, secured by government bonds.
amounting to not less than one-half its
Er.s1 etc
less than % per cent, may apply TO the
Comptroller Of the Currency 10 issue ad-
ditional circulating notes, 10 be secured
by bonds other than those Of the United
States
Conditions Must Control
The Comptroller Of the Currency may
approve the application if business con-
ditions demand such additional circula- /
ton" The unofficial bonds of the national /
bank may be deposited with the Treas /
urer or any assistant treasurer Of the /
United States, and the bank VIII then re- I
ceive currency notes In blank equal in /
amount 10 70 per cent Of the market value /
Of the bonds deposited. There are provi- /
sions limiting the amount to be Issued /
The entire issue of emergency currency is /
not 10 exceed $4,000 000
The Senate leaders would not make any 4
great opposition 10 an effort TO amend the /
bill, so that the deposit bonds may be ac- /
cepted at & or 80 per cent of their market /
value II is supposed that this effort will /
be made.
Character of Securities.
Section describes the character of /
the securities TO be accepted to secure the
issue 0f fba ra-y ofr.-,l. tg,,,- --~.+--
are: Bonds and other interest-bearingI /
securities Of any State; any legally au- /
thorized bonds issued for municipal pur-
poses by any city or county which has
been In existence as city or county for
fifteen years, and which for ten Years
previous 10 the deposit has not defaulted
In the payment Of principal or interest
on any funded debt, and has a population
OF more than 2,000 and whose net in
debtedness does not exceed 10 per cent of /
the valuation Of its taxable property: /
first mortgage bonds of any railroad
company, not including street railway
bonds. which have paid dividends Of more
than 4 per cent regularly and continuous
ly on its entire capital stock for not less
than five years. These securities may be
accepted by the Treasurer of the United
States with the approval of the Secre-
tsTy Of the Treasury.
Opposition to Railroad Bonds.
That there will be opposition 10 au-
thorizing the use of railroad bonds as Sc
curity Is expected, but it is believed by
leading Senators that this will not ieop-
ardize the chances Of the measure. In
fact there Is no great disposition to in
& cf m hn gzF
the opposition is in any way general
Section 3 describes the manner OF de-
posting the bonds.
Section 4 reiterates the law providing
for a tax on circulation secured by
Panama bonds and per cent consols.
and provides in addition that the new cir
culation, when secured by unofficial
bonds, shall pay a tax Of one-half of ]
per cent month during the period Of
circulation. This tax is 10 force the re-
tirement OF the notes when the money
striugency has passed, The amount col
lected from the taxes is to be paid into
the reserve fund for the redemption OF
United States Treasury and other notes
This is an entirely new idea Il is based
on the principle that as the reserve fund
IS behind the new notes. the tax should
go 10 the reserve fund.
Repeats Withdrawal Limit.
Section amounts to a repeal Of the law
limiting the amount Of circulating na-
tlonal bank notes that may be withdrawn
each month It provides that when q
national bank desires TO withdraw its cir
culating notes secured by United States
bonds. it may deposit lawful money with
the Treasury Of the United States and I.
withdraw a proportionate amount OF Il
bonds held as security for the circulating