The Birmingham age-herald., 1908-02-12
Question of Bond Security Is
 Aired In Senate
: NOT 4 PARTY QUESTION
Changes Are Suggested and Amend ments Are Offered To the Bill Which Receives Close At
 tention From Senators.

Washington, February 11.-Senator AL drich today called up his currency oil and formal amendments made by the finance committee were adopted by the Senate.
 Senator Burkett of Nebraska inquired concerning the provisions of the distribu- ton of the funds by the Secretary of the Treasury, and MT. Aldrich replied that if the currency provided should not be need ed in one state it should be apportioned to another state in the same section of the country.
 Inquiry was made by Senator Deliver whether the provision in respect to rail- road bonds as security for currency clrcu- lation would include bonds of roads other than those operated by steam. He said that in Iowa the interurban electric roads have increased in independence, and he had been asked if their securities would be accepted under the bill.
 MT. .Aldrich replied that if the roads are interstate roads and made reports to the interstate commerce commission they would be included <.
 Electric Road Bonds.
 Mir. Bailey said there was, in his own opinion, no doubt that this bill does ex- clude interurban electric roads. He said the recently enacted rate law, in his opln- ion did not require any roads except the steam railroads to report to the inter- state commerce commission.
 "As great conveniences as these elec- tric roads are," said MT. Bailey "I think they have not been tried sufficiently to be accepted. as a basis of our currency" He suggested that the steam railroads might seriously reduce the earnings of the electric roads,
 The suggestion was advanced by MT. Rayner that there had been recent de- cisions to Che effect that electric roais come under the rate law lie objected to the use of railroad bonds of any deserip ton as security for bank circulation.
 "They are going in, however" declared MT. Bailey. "The republicans have the majority and the power to do so, and they will put in railroad bonds. The dem ocrats have made no captious opposition to the bill They have taken the position that if they could not make the bill what it should be. they will make 1t good as
 
 vote for or against it as they see fit, be- cause" he added with emphasis. this is not party question, and it should not be made party question"
 Only Two Roads.
 Pointing out that under the provision of the bill, the Louisville and Nash vile and the Illinois Central railways were tue only two companies in the south, the bonds of which could be accepted for currency issues under this bill, MT. Bailey said 1t was desirable that the railroads of the south receive a share of benefits to be derived from this meas ure. In reply, MT. Aldrich said the finance committee had under consideration modi- fications of that part of the bill.
 In answer to question by MT Gull person as to the methods to be employed by the Secretary of the Treasury in de- termining the market value of the bonds, MT. Aldrich said that they were all quot ed on exchange, and he thought there would be no difficulty on that score.
 MT. LaFollette had read the amend ments he intends to offer. They provide that no bond of railroad should be accepted for security for currency un- less the face value and cost of repro ducing the railroad shall have been ascer- tained by the interstate commerce com mission and currency issued on such bonds shall not be more than 75 per cent of the physical value of the road on which the bonds are based.
 Notice was given by MT. McLaurin of Mississippi of an amendment he will offer, limiting the amount of currency to be issued on any bonds to the par value of the bonds
 Daniels Amendment.
 Senator Daniel offered an amendment providing that bonds of railroads that 'have paid regularly and continuously for five years next preceding the deposit of its bonds. the interest due on all It's bonds" can be used for currency issues. That amendment, he said, would allow the use of bonds of roads that have not paid dividends on stock. This would per- init the use of the bonds of a number of southern roads, which are now ex- cluded.
 Upon the suggestion of MT. Aldrich, MT Daniels amendment was referred to the finance committee, where 1t will be considered.
 A change was suggested by MT. McCum- Der of North Dakota, requiring the Secre- tary of the Treasury to determine the f'actual value of the bonds offered for currency circulation instead of the mar Izet value" He declared that the market value may f1uctuate greatly, but the act ual value could be ascertained according to the earning power covering a number of years.
 MT. Bailey entered upon extended re- marks concerning the banking situation of the country saying that he hoped to see the time when all the issues of cur rency by the banks would be done away with, and in their place an issue of gov ernmcnt currency, payable in gold. He saw little difference, so far as the govern ments responsibility is concerned, be- tween these two classes of currency be- cause even the emergency circulation un- der consideration is ultimately redeem- able in gold if the banks fail to redeem it. Mr. Bailey said he would like to have this bill provide for s1,O0O, ,0O00Oo of emer- gency currency instead of $5O0.000000.
 Debt Must Be Paid.
 He believed in paying off the govern ment debt, and did not want any currency system that required public debt to make it operative. He was not in favor of ''greenbackism." He was not in favor of issuing money that has for its basis merely a legend declaring that it was money He wanted the notes of the gov ernment redeemable in coin.
 Senator Lodge gave notice of an amend ment. including among the bonds available