New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1908-05-31
TIE CURRENCY ACT.

The currency bill just passed Is no SOLUTION Oh
the country's currency problem and Goes hoI
pretend TO be. 1t is frankly an emergency
mea sure-that is it is an attempt to remedy
the defects of the currency only When those
defects are most disastrously felt in the period
ical commercial crises The larger question OF
making the supply elastic at all times anu
seasons is left TO subsequent consneraLoh'
Moreover. the life of the bill is limited to SIX
years-a direct acknowledgment that 1t Is OF
only temporary, makeshift character anc
that the whole problem will be taken up ana
settled later. The motive which led to the
passing of an emergency currency bill, after
it had apparently been decided to leave the
subject over for further study and inVestlga-
ton by a commission, was the lear inat d
crisis might come on Unexpectedly ana tha'
congress would be blamed for its failure to
legisIate for such a crisis. 1t has all along
seemed TO us that this fear was not well
grounded. Such catastrophe as occurred last
fall comes as the climax of a long period or
overexpansion and excessive strain on credit. II
does not and. fortunately, can not, recur at ire
ouent intervals and the country is now at the
other end of the swing Of the commercial
pendulum If we had felt that there was any
likelihood of q recurrence of recent conditions
in the near future. we. too, should have urged
the need of a temporary emergency measure 10
guard against a crisis while the graver prob
lens of q real and scientific reform of the cur
rency were receiving thorough consideration.
Congress has looked at the immediate future
with more apprehension than IS felt by bank
ers' and business men. In our Judgment there
was neither an economic demand nor public
demand for an emergency bill.
AS for the act itself il is far from a perfect
measure-if its trainers had regarded it as Of
not pH-a
limited its life 10 six years-but il IS much
better than the original Aldrich bill 1t recog-
nizes the suitability Of commercial paper as the
basis of circulation. which the Aldrich bill de-
MED and that fact measures the real progress
made toward currency reform during this SEES
sion. Against the AldriCh bill we always OBJ
jected that it would prove a failure in an emer-
gency because the banks would not have the
required securities on hand, or If they did In
vest In them their doing so would result in
giving the bonds a fictitious value The new
law allows the banks the option of taking out
circulation on commercial paper, and that Is a
asset which, of course, they always have in
their vaults Under it the banks at least will
have the required securities in their possession
whenever an emergency arises, and they can
not be used 10 serve the interests Of the bond
SPECTATORS. In other words, the compromise
enacted eliminates the most serious defects Of
the Aldrich bill. While not a sound measure
since it fails to require q reserve against the
emergency notes and to provide redemption
facilities II would probably serve useful pur-
pose in such a crisis that of last fall.
We should have liked TO see the Limitation on
the life of the bill made two years instead of
six for this question will not rest until 1t is
settled and settled right And we hope that
the law will not remain in force six years, but
that real currency reform going to the root Of
the defects in our system, Will be promptly
effected. The currency commission should adj
dress itself earnestly to the preparation Of a
thorough measure, one which would make the
circulating medium really elastic. Congress
should not require six years Of grace before
giving the business interests of this country
as serviceable a hanknote system foreign
nations posspSS