The Washington herald., 1908-02-19

Senator Stone, Of Missouri. yesterday
held the floor in the Senate during the
consideration of the Aldrich emergency
currency bill. and upon his speech In op-
position to the bin and in favor OF the
/ Democratic doctrine OF government
money only he hung political discourse
which eliminated in the prophecy that
the result Of the recent Republican
panic" would be the return Of the Demo
cratic party 10 power.
/ The speaker was twice interrupted by
! Senator's Hopkins, OF Illinois. and Bacon,
Of Georgia. who asked questions intended
10 bring out more definitely his opinions
regarding the proper sort OF emergency
currency. But at no time did the ex-
change OF ideas develop into an extended
debate, and Senator Stone enjoyed more
trend Of his address than has been The
portion Of any other Democrat who has
discussed the bill on the floor.
FRvors Treasury Notes.
Senator Stone opposed the policy OF
delegating 10 national banks the sovereign
function Of issuing money. but said that
he was not opposed 10 an emergency
currency. Il favor the emergency treas
ury note" said he. instead OF the emer-
gency bank note"
we have practically turned over 70 the
5000 national banks in this country the
high prerogative Of supplying the people
with money wherewith 10 transact their
business Under the law they have the
right now 10 take out additional circu-
latiOn in the form OF bank notes 10 the
amount Of hundreds Of millions above
and beyond the circulation II has pleased
them 10 furnish the people. and under
the law they have the right now 10 retire
millions Of their outstanding circula-
ton from year 10 year
In other words. they have the high
prerogative OF supplying a large proper
ton Of our currency. and the power
10 expand and contract II within certain
limitations. as it may please them TO do
To pass this bill in its present form
would augment that power. Il would
afford new opportunity 10 expand and
contract the currency on q larger scale
and with greater rspidity than under the
present law"
He favored a law requiring banks 70
keep "A larger proportion Of their reserves
in their own vaults. say three-hfths. The
banks could invest these reserves in State,
county, and municipal bonds. bearing 3
and per cent, and hold them as a part
OF their reserves A per cent bond
would produce as much in the long run
as money loaned 70 the New York banks
II such an investment OF bank reserves
should be made. IN times Of emergency.
the banks could use their bonds or a part
OF them 20 procure emergency currency
AZ the Treasury 10 tide them over
Wants Deposits Guaranteed.
He advocated a governmental guaranty
fund for the payment OF depositors in in
solvent banks. approving Of either the
plan OF Senator CuIbersou 70 form an as
ISOLATION OF national banks. and provide
for the payment Of the depositors IN in
solvent institutions by a pro rata assess
ment upon members Of the association.
OF the plan Of Senator Nelson for a re-
serve fund in the Treasury. derived from
taxes upon the banks circulation. adding
that he favored a small special tax 10
create and maintain such fund.
AT the proper time" he said. II no
one else shall do so. I shall propose an
amendment requiring the Secretary OF the
Treasury in distributing the deposits Of
public moneys in national bank deposit
taries 70 make the distribution according
10 population as shown BY the last pre-
ceding census OF the United States. and
also requiring the banks accepting such
deposits 10 pay interest az a rate not less
than per cent per annum.
Undoubtedly New York is the chief
financial center OF the countrywide much
so for the country's good-and the vol
ume OF its clearances is vastly in ex-
cess OF those Of other cities. but these
clearances are not necessarily indicative
Of healthful and legitimate commerce or
OF an honest and legitimate business.
What proportion Of the New York clear
ances is due to stock gambling Stock
gambling Is carried on in other centers,
but the volume OF these transactions IN
New York, often predicated on margins.
and when not so predicated. are still
often fictitious and meretriciOus. is great
er than in all the other cities combined
1T is practically impossible for the
Secretary OF the Treasury. however great
his abilities or high his purpose. TO keep
the enormous transactions of the Treas
ury Department under his own eyes.
Abuses are possible. and where they are
possible they should be guarded against
Banks In stock CANDLES.
Senator Stone gave figures 10 show that
in November the banks in the New York
Clearing House reported deposits Of over
81. co., 900. 900. of which one-half was due
TO other banks. The loans slightly ex-
ceeded the deposits. and over half were
on stock exchange collateral; that IS the
money collected from millions OF depos-
itOrs throughout the country by their
local banks was used as the basis of Wall
street credit. 1T has been reported. "
he said. that between 1896 and 1906 the
New York bank loans on stock exchange
collateral increased from S162, 36l. 654 to
$40. 2i0.7O5. while commercial loans in
creased In the same period from Sl5l, 1875 90
to only s25S.34O.272. This shows TO what
extent the banks have become involved
in stock transactions, and shows how the
money of the people. committed to the
banks, is being diverted from the legiti-
mate channels Of trade into the vortex
OF the gambling exchanges. Last autumn
when the country banks called for their
money in New York. their demands could
not be met for the reason that II was
tied up in stock speculations.
These gigantic gambling schemes car
ripd ~, in ba vrpaf pornrY7ar.faI - II