Monroe City Democrat. (Monroe City, Mo.) 1888-1919, 1908-07-16
THE ALDRICH-vREELAND BILL.

Certain Republican leaders in Congress,
like Aldrich and Vreeland, following a
coterie of great bankers and financiers,
affected to believe that the panic was due
to a lack of money and the want OF
greater fleXibility in our currency system.
Thereupon they started in to incubate a
remedy, and the result is the hyphenated
mOnstrosity known as the Aldrich-Vree-
land law. OF this law 1 wish now to
speak. Prior to its passage national
bank notes were issued only when United
States bonds were deposited to secure
them. The new law makes two radical
changes in this particular. First, under
this law national banks may now under
certain conditions pledge state, county,
town and municipal or district bonds as
the basis of their circulation. Upon such
bonds the banks may receive circulating
notes equal in amount to ninety per CEN
tum of the market value of the bonds
deposited, the market value to be as
certained under the direction of the Sec
rotary of the Treasury, not to exceed the
par value of the securities. Second,
under this law ten or more national
banks, having an aggregate capital and
surplus of at least 50, 600, 600, may or
rency association" The chief purpose OF
these associations is TO enable an individ-
ual bank, Il member of the association.
to use it's commercial paper, that is,
lation. II a bank holding membership in
one of these associations should desire
to use its commercial paper to obtain
additional circulation, it would be re-
qured in the first instance to lay the
proposition before the board of managers
of the association, together with the
securities it offered to pledge. If the
officers of the association should approve
the application, it would then be their
duty to value the securities and trans
init the proposition TO the Comptroller of
the Currency. If in turn that officer
should approve it, it would then be his
duty to lay it before the Secretary of the
Treasury, and if he should be of opinion
that the conditions contemplated by the
law existed and that all statutory re-
quirements had been complied with, he
would direct the issue of additional cir
culating notes, based on the commercial
securities pledged, to an amount, in his
discretion, not to exceed seventy-five per
centum of the cash value of the Securi-
ties deposited. These circulating notes
would be delivered in the first instance
to the currency association for and on
behalf of the particular bank applying
for them. The entire association, under
the law, would be responsible for the re-
demption of the notes, the association
holding the pledged securities to indemni-
fy it. The evident and confessed object
of the law is to enable the larger national
banks to unite their credit and CONNER
cial assets, and by cooperation to utilize
them to obtain additional circulation as
they might have occasion to need it. The
law fixes the aggregate amount that may
be issued under its provisions at $780,
600, CO., All notes issued under the pro-
visions of this act are made subject to 4
tax at the rate of 3 per cent per annum
for the first month, and one per cent per
month additional thereafter, until a rate
of 10 per cent per annum is reached. The
notes issued under this law are known as
ferred to is imposed to hasten their early
retirement.
This. in substance, is the remedy GER
tain national bankers and Republican
..v To-,
pose as a panic preventive and panacea.
The best feature of the law is the pro-
vision limiting its continuance to six
years. That is the duration fixed by its
terms. / venture to say. however. tiIat
while it is claimed to be an experiment
tentative and temporary, it has been
really put out as a feeler. II the people
endorse the measure, If they fail to eX-
press their disapproval of it, then tho
policy it inaugurateS will be continued
1t is the first hesitating step toward
turning our monetary system over to
the national banks. Movements of this
kind gather volume as they go. Is it
possible that the American people are
willing to endorse this dangerous depar-
ture? Here, more than ever before, the
government abdicateS the sovereign func-
ton imposed upon it by the constitution
of making money. and confers that
great pTerOgative. at least in substance.
upon corporations. The high duty OF
providing a safe and adequate currency
and important functions of our sOver-
eighty 1t is a function the American
people cannot afford to delegate to pri-
vate, or semi-private, public bodies
That is a prerogative that should re-
main exclusive and unimpaired in the
hands of the people, or in the hands of
their public Representatives. 1t is no
answer to say that in great emer-
gency, like that recently experienced, the
banks under a law of this character
would be greatly strengthened in their
ability to relieve a monetary and
commercial stress. If that were all of
it, and if there were no other and higher
consideration involved, and if the banks
should in the utmost good faith use the
law alone for legitimate purposes, It
might be that no immediate harm would
result. But the principle is wrong, the
policy vicious. and both trench upon the
constitutional privilege and duty of the
sovereign government. Moreover, this
law. as it is, may be employed to work
unspeakable injury. 1t enables banks
and banking associations to value their
own securities and to obtain circulating