The Washington herald., 1908-01-15

The differences Of opinion among bank
ers and fnanciers generally respecting
financial legislation are reflected In the
marked contrast between the Aldrich bill
and the comprehensive financial measure
introduced in the House by Representa-
tive Fowler, Of New Jersey. Mr.. FOwler's
bill 'to establish simple and scientific
monetary system, founded upon gold,
guaranteed bank notes and silver" IS the
product of his own study Of currency
needs and conditions. and so far has no
other backing than that supplied by its
authors excellent reputation as a theo-
reticai financier. Last year Mr.. Fowler
appeared as the sponsor of a plan for an
asset currency engrafted on the present
national banking SYSTEM this year he has
squarely abandoned all such makeshifts
for monetary system amounting to
revolution of that to which the country
has become accustomed.
Retaining the national banks in his new
system. he proposes TO substitute for
bond-secured currency note issues equiv
alent in amount to paid-up banking capi-
tai, redeemabIe in gold and secured by the
combined credit of the banks AS he con-
templates the ultimate retirement Of the
greenbacks. our currency would consist
solely of gold and silver coin or their pa
per representatives, and national bank
guaranteed credit notes" Provision is
made for an adequate guarantee fund for
the redemption of notes and the payment
OF depositors. An elaborate scheme Of
bank note redemption agencies is charac-
teristic of the bill. Each of these agencies
is to be placed in charge Of a deputy
comptroller, with a duty Of general su-
pervision over the banks in his district
The deputy com2trollers, though to some
extent responsible TO the Comptroller of
the Currency, are not appointiye officers,
but are chosen by a board of managers Sc
lected by the banks associated in each re-
demptiou district. This board is given
authority TO permit the issue Of notes
IN excess of banking capital. No limit
is provided 10 this issue save that of the
judgment of the board Of managers, so
that the volume of outstanding bank note
currency will be largely determined by
these boards. In other words. the inha-
ton of the currency beyond the issues
authorized by law will be wholly con-
trolled by the banks themselves.
Thus a distinctive feature Of the Fowler
bill is a decentralization OF the power of
regulating. currency issues. as well as its
redistribution. Other provisions Of the bill
relative 10 deposits Of public moneys and
TO the use Of checks ana drafts in pay
ment of public dues would still fur
ther tend to diminish the influence Of the
Treasury I'm the money market. The
Aldrich bill, on the other hand, vests
in the Treasury authority TO determine
the conditions under which an emer-
gency issue Of currency may be made II
augments Treasury control over the finan-
cial situation. while the Fowler bill nate
rally diminishes if it does not alto
gether do away with it. Indeed that is
one of the main objects of the Fowler
bill. Between the advocates of these
widely differing measures no compro-
mise is possible. In the popular mind, the
essential point is whether the government
or the banks shall issue and &C ltrol our
paper currency. Public opinion. right
or wrong. being what it is, that Ques-
ton is not likely 10 be soon decided iu
favor of the Fowler bill. however de-
fensible il may be from theoretical
standpoint