Evening bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1895-1912, 1908-09-21
What BONDS ARE
TO Be ACCEPTED
Financial Law Has
Big Problem For
Cortely0u
(StaT Correspondence


Who's to decide what railroad bonds
and stocks shall be accepted by the
Secretary of the Treasury as security
for currency issues under the emer-
eency provisions of the Aldrich-
Vreeland Act?
Secretary of the Treasury Cortel-
you and the authorities of the Inter-
state Commerce Commission have
been wrestling with this question for
some time, and the only result thus
far reached is a feeling in some i'm
portant quarters that the movement
for making valuation Of the rail-
roads has received, all unintentional-
| ~. big lift by reason of the passage
of the currency law.
The Secretary of the Treasury is
given full authority to accept or re-
| ject any security presented to him.
Naturally. he is anxious that what
ever he accepts shall be of unques-
tionably gilt-edgcd character. His in
designations, in the effort to ascer-
tain IL there is any standard by
which to judge railroad securities,
have broughts out curious situa-
ton.
Anticipating that 1t might become
his duty this autumn to pass on prof
fercd issues of this kind, Secretary
Cortelyou some weeks ago addressed
n communication to the Interstate
Commerce Commission, asking IL that
body could furnish him information
about the railroad securities of the
country which would enable him to
pass judgment on them
Staggering Demand
As there are some $4,000, 900, 900
of these outstanding, representing al
most innumerable characters, issues,
classes of security, etc, 1t looked like
rather a staggosing demand. The
commission was able distinctly to
recollect that 1t had strongly recon-
mended to Congress the passage OF
an act for a valuation of the rail-
roads, which would have given 1t
means to acquire just such informa-
ton as this.
Inquiry was instituted as to what
resources of information were at
sion could answer such an inquiry.
II developed that the commission au-
thorities on such subjects didn't re-
member that railroad securities were
made available as security for circu-
lation under the new act. In fact,
Everybody seemed to have quite a dis
tinct impression that the railroad
securities were not allowed.
On the morning of the day when
Senator LaFollette was about to
open up his great speech against the
Aldrich bill, Senator Aldrich rose and
cut the ground from under LaFol-
lette's feet by moving an amendment
to take railroad bonds out of the list,
leaving only Government. State,
County, and Municipal bonds of Ger,
tain descriptions. This was regard
ed at the time as a most clever turn
by which to unhorse LaFollette.
LaFollette made his speech, and
then there was sag in the move
ment for the legislation. and for a
month or so II looked as II no cur
rencs legislation could pass. In the
last days Of the session the Vreeland
bill was brought forward, and 1t and
the Aldrich bin were welded togeth,
or into a compromise measure. This
measure passed.
So when they found that the Sec
retary of the Treasury was asking
about railroad bonds and stocks. tn,
Interstate Commerce people got on
a copy Of the Aldrich-Vreeland Law
as passed, and studied 1t. They foun'
what had happened.
Down In the body of the bill wa.
an enumeration of securities which
might be received: National, State
County, and Municipal bonds; AM
farther on ANY other securities
which the Secretary might approve
ANY other securities; that includ
ed railroad stocks, bonds, commercial
paper, anything else that the Score
tary should approve. The railroad
bonds were back in the bill, ant
along with them the stocks! Sena
tor Aldrich had everything he origl
nally wanted, and more.
Having figured all this out from
study of the bill, the Interstate Com
mission authorities conferred, an
then Chairman Knapp went over t
the Treasury building to see Secre
tary Cortelyou.
Up To Commission
The conference resulted In deci
sion which practically amounts I
the Interstate Commission undertak
ing to make valuation of the rail
roads when that is made necessar
under the workings of the Currfnc