The Washington herald., 1908-01-09
The Aldrleh Currency Measure.

Inc AlutECn currency MEdSulE-
It is easy 10 multiply objections TO the
Aldrich currency biIl and the air viii be
fuH Of them for some months to come
But we apprehend that taken as a whole
the new measure will be pretty gener-
ally accepted by the financial community
as the best thar can be had under exist
ing political conditions Notwithstanding
a campaign of education extending over
q period oi twenty years. little impress
sion has been made ON the public mind
favorable to the adoption in this -coun-
try of the banking systems that have
been found 10 work well elsewhere. Our
national banks have become so thor
oughly a part of the American financial
system and our people are so welded
10 the idea of a bank currency, secured
dollar for dollar and as sound as gold
certificates, that il seems politically i'm
possible 20 introduce any radical de
parture from the principles governing
the issue OF our present bank notes At
al events. there are lacking in either
House statesmen who combine mastery
of finance with the faculty and power Of
leadership required TO pilot through Con-
gress amy comprehensive measure of cur
rency reform.
Senator Aldrichs bill seeks 10 eugraft
on the national banking system new
feature. namely. an emergency currency
differing as little as possible from the
bank currency already ia circulation. It
VIII he limited In amount subject 90 a
higher tax and secured by other than
tinted State- bonds. These are the chief
points o. divergence from the existing
currency. The bill makes all bank notes.
permanent and temporary. retirable at
the option of the banks. with the obvious
intention of making the entire volume of
bank issues more responsive TO the vary
ing demands of business. II must be
said that To "a considerable extent the
provisions Of the bill are experimental
There is no precise analogy 10 an emer-
gency currency of the sort contemplated.
Perhaps the issue Of clearinghouse GER
tihcates comes nearer 20 it than any
either feature of American finance. The
function performed by such certificates
tlt t4li.'H hl 1tttf-0r AA rs ftH-'-Nf'Ar M bE
better performed by an emergency cur
reucy. But time alone will show whether
the proposed currency viii meet the an
Hual crop-moying stringency. or whether
it viii prove sufficiently flexible and re-
sponsive 10 satisfy current demands for
funds. Yet the general belief und1ubted-
ly is that it viii Doe helpful
The most significant thing about the
Aldnch bin is that the emergency cur
reney viii he issued mt the option of the
Treasury Department. and that the Sec
Rotary of the Treasury is given novel
and important powers with respect 10 it,
This is quite I'm accord with the popular
idea that the issue Of money should not
be intrusted wholly to the banks. but
it traverses the theory OF many compe-
tent fnauciers chat the government
should be divorced from the banking bus
mess. The practical effect of comforting
authority on the Secretary of the Treas
ury 10 issue an emergency currency
whenever. i'm his judgment, business con-
dftioHs warrant it is % make the Treas
ury . larger factor than ever in banking
operations. As the power of the Score
taTy over the money market now exer-
cised 10y his disposition of government
deposits viii remain. his control Of the
financial situation viii De SO enlarged
by means Of am emergency currency as
to enhance his prestige 90 am extraor-
binary degree, ana his capacity for mis-
chief will be the exact equivalent of the