The Montgomery advertiser., 1908-02-21

>1.4xnl@n ok me aSlnaNce CVfuht,toc nent In bonds would reduce the amount Of money reserves of the bank. and hence Dc Of no service whatever in strengthening their position; that if q posits in these SonScs SSs it Ssa could only M use use the bonds in an emergency to get 20 per cent Of these bonds in. the emer- sepcy currency, and that the last state of the bank would De worse than the
 mi. might be true if the banks had 70 ehtp their currency to some dis tant point to acquire these bonds. but the class of bonds mentioned tn the ptfis, Etate. county and municipal. are found In every state and much of the money paid for them would find it's way back into the vaults of the banks and incidentally the interest paid on these bonds would remain at home.
 In Times of Panic.
 Another advantage this amendment would secure. fs that in times of panic. the banks holding these bonds could quickly secure emergency notes and Under the present law National Banks not in reserve cities are required to keep only 6 per cent of their deposits Tn money in their vaults. g per cent banks. If there is anything more in. tangible than a deposit in a reserve bank in time of panic I have yet to know it. You may call the spirits from the vasty deep and get asresponse as readily as you can get money from 2 reserve agent ir times of financial distress; so that this investment of. b per cent in<these bonds as part Of a reserve. another per cent being in legal tender money, would nearly double the money assets of bank when most needed as compared with present re- quirements.
 On the s1st of January last, the Congress a message, ,sfh many respects remarkable message: one that should command our attention, but one that think was received by many in this chamber with less enthusiasm than that exhibited in another chamber not far distant. For fear that Senators on the other side have forgotten some por- tions of this message I desire to read an extract.
 The President said s,I do not know whether 1t is possible but if possible. 1t is certainly desirable. that in con- nectton with measures to restrain stock watering and over-capitalization there should be measures taken to prevent at least the grosser forms of gambling in securities and commodities. such as making large sales of what men do not possess and cornering. the market. Legitimate purchases of commodities ment have no connection whatever with purchases of stocks or other securities or commodities on a margin for specu- lative and gambling purposes. There ling at cards. or in lotteries. or on the race track, and gambling in the stock market One method fs just as per- nicioue to the body polite as the other in Kind. and in degree the evil worked :. Now if this amendment Is passed. 1t Is my opinion that reducing the amount that may be deposited in reserve banks from nine to five per cent of deposits, thirds of their reserves in II money. none or
 money and bonds. in their vaults would reduce the congestion of money in the great money centers by more than one hundred million dollars so far as in- terior banks alone are concerned, and to that extent reduce the volume of money largely employed in speculative ventures. The reduction in volume of currency at any given point strikes President calls him, the first blow. So that this amendment is somewhat in line with the recommendation sent to us by the President.
 ! think the amendment I have sug- gested is much better than the pro- vision contained in the original bill, for if all National Banks should be re- qutred to keep 10. per cent of their deposits in legal tender in their vaults, in the amount Of money locked up in banks, not available for loans and dis counts; whilst the investment of halt that amount fin bonds as provided by the amendment to the. bill would give equal safety and better returns to the banks. The interest on the bonds so held would give larger return to the bank holding them than any reserve agent could pay as interest on balances subject to check
 I have heard 1t said here stlat the bill presented by the Committee was predestinated and foreordained to pass just as 1t came to the Senate with such amendments as may be suggested by the Committee think an eTnergency Dill should be passed; think the potentiality of such a bill would large ly prevent panics.I want the very best Dill T can get. and am not without hope that any amendment that will benefit the people, restore confidence, strengthen the security of banks and confidence in them, and tend to prevent 8 recurrence of the loss and suffering that the recent panic caused, will ad- dress itself to the patriotic considera- ton of every Senator, no matter from which side of this chamber the suR- gestion may come.
 may be mistaken. trust I am not.
 I