The Birmingham age-herald., 1908-02-20
CAGE CONDEMS
 THE ALDR|CH BILL
Former Secretary of Treasury
 Gives His Views
FOWLER BILL IS ENDORSED
Mir. Gage Points Out Many Defects of the Aldrich Measure and Says the Fowler Bill Contains the Es-
 sentials of Banking.

Washington, February 19.-The prin- defended today by the former secretary of the treasury, Lyman J. Gage, Charles A.. Conant of New York and Prof Joseph French Johnson of New York university before the House committee of banking and currency.
 Secretary Gage said that we had reached the most important period in the financial history of the country for the rast 40 or 50 years, and that the solution of the problem depended largely on the men making up the banking and cur rency committee.
 It was early impressed on him, said MT. Gage, that credit currency issued on proper assets, received and exchanged, containing only the amounts of credit, was an effective, useful and economic agency in the industrial exchanges of the people, and was the best system of bank ing.
 While MT Gage was speaking, Governor Guild of Massachusetts and party came into the room and were interested listen CTS to the former secretary's exposure of the financial question.
 Taking up the present financial system, MT. Gage said it ought to be revised from the very beginning. He regarded the Fowler bill as a comprehensive measure containing in itself the evidence that the author understands clearly and speci- fically the principles which underlie the banking and currency relationship of things and has brought forth measure which in contrast to the one offered in the Senate has reached the fundamentals.
 Cages Criticism.
 Continuing, MT Gage said:
 T have no sympathy at all with the Aldrich bill. I don't believe it is curative of our evils. At best it is a patch or Il panacea which may once in ten years be availed of when the country Is in con dition of intense panic or when many Of the evils of the panic are developing, and it may not be effective then In the meantime, if adopted, it will probably put us to sleep. 1t is gentle narcotic that wooes us into false repose from which we will suffer many nightmare and from which we will awake at last in trouble and real agony"
 As a banker, he said he would ask to ccme under the provisions of the Fowler bill and would look with dread and ap- prehension if the Aldrich bill should be- come a law.
 MT. Conant was the first speaker at the afternoon session of the committee He declared that one of the essential causes of the recent panic was that the credit system had become top heavy as a result of great issues of securities and the expansion of state banking without adequate reserves. He criti- cised the banks, especially the trust companies for using deposits payable on demand in loans on securities in too large a proportion. He declared that the reserves held against such loans were inadequate and that even such re- serves as were held were impaired in value by the fact that they were con stituted to considerable extent of national bank notes instead of gold.
 Cooperation Secured.
 It was among the great merits of the Fowler bill, MT. Conant said, that it brought about cooperation and mu- tual scrutiny among the national banks and also tended to bring the local banks into the national system, where they would be subjected to the supervision aud the reserve requirements of the national banking law. This would be accomplished by the provision for the guarantee of deposits which imposed upon the local banks of each district 10 per cent of the loss incurred by the failure of any bank within the dis trict To avoid such losses banks