Mexico weekly ledger., 1908-07-16


the credit Of the canal fund Both bond
and certificates were sold 10 aid the ma
tioual banks. Whenever anything relat
ing to bonds or the currency Is on deck
the national banks are sure to be in th'
midst thereof. One feature Of this bono
transaction I wish TO emphasize, sine
Il exhibits the touching tenderness OF Cor,
telyou for the banks. In his first pub
lished offer he proposed to sell them, al
the law requires they should be sold. e
the public without discrimination, fol
cash full paid on the terms of the offer
subsequently he arbitrarily changed thai
policy so as to give preferences for botf
bonds and certificates to national bank
alone. This he did on the ground tina
individual Purchasers would demand
money from the banks with which L
make their payments. The spectacle oil
depositors asking their own money from
the banks 10 make investments appealed
to the Secretary as so unconscionable and
as involving so great a hardship to this
banks. that he determined to deal with
the banks alone. AS to the $50, 00e, 900 Of
bonds, he declared his intention 10 re-
quire only 10 per cent cash from the
banks In payment for them, and that the
remaining 30 per cent should remain In
the banks as government deposits with
out interest. Now these bonds draw
per cent interest, and so when a banh
purchased a 500 bond, and paid only s1t
on 1t, retaining the other 500 as a &c
4 RE-@N "NHt1& a NV Win III
that condition lasted, would be really re-
ceiving 20 per cent interest on the
amount actually invested. For one who
accused the banks. as the President did,
Of being chiefly responsible for the panic,
this favoritlsm is astounding. 1t Is such
Inconsistencies that make me so Otter
question the good faith Of his u~tterances
Republican apologists. unable to agree,
are '~scrapping among themselves as q
the OF the panic. Some say 1t IL
over-produetfon, some that IL is over
speculation. some that It is bad banking,
some Lhat Il is an insufficient currency.
some that IT Is a defective monetary sys-
tenn, while others charge il directly e
what they denominate the rabid indis-
c~retions Of the President; and the Presi.
dent answers to the mayor Of Omaha, Sc
to come the sooner the better, and he
was proud of his part In II. Proud OF
Il! What think you OF thatf Proud &c
have worked havoc among the industries
idleness to a million men n the gauni
specter OF want to countless homes
proud to have clogged the wheels OF
progress proud to have cast a dark
mayor OF Omaha. He Is an old-time
friend OF the President, and l know him
70 De an honorable man. Yet II ~surpasses
belief, II seems incredible, that the
President OF the United States, this
popular darling, could nave so expressed
himself. But whatever the cause, and
1t is undoubtedly due to more than one
cause, the great central fact remains
that we nave suffered a disastrous panic
under Republican auspices. How long
the panic may linger none can forecast
The recuperative energy of our people is
marvellous, and already they are bringing
order out OF chaos. We will have the
experience of other panics. Gradually
our wounded Industries will limp out Of
the storm, and sooner or later normal
conditions will be restored. But for the
enormous damage already done, and for
inevitable losses yet to accrue, there can
be. no restitution. Out Of it all comes
only this poor consolation, hat II is q
Republican panic. Not even in the re-
hottest degree can It be charged to the
Democratic party. That is the signih-
cant fact I wish especially to impress. II
proves the falsity of Republican accusa-
ton and the emptiness of Republican
boasting. Hereafter sane men will give
less heed to ~traducers when the name OF
Bryan is heard.
THE ALDRICH-vREELAND BILL.
Certain Republican leaders in Congress.
like Aldrich and Vreeland, following a
coterie of great bankers and fnanciers,
affected to believe that the panic was due
TO a lack of money n the want OF
greater ftexibility in our currency system
Thereupon they started In to incubate q
remedy, and the result is the hyphenated
monstrosity known as the Aldrich-Vree.
Land law. OF this law I wish now tc
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, undel
this law national n may now undel
certain conditions pledge state, county
town n municipal or district bonds a
the basis Of their circulation. Upon sucI
bonds the banks may receive circuiatinI
notes equal In amount to ninety per cen
tum of the market value of the bond
deposited, the market value 10 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 IS, 900, 900, may or
ganize what Is termed a national cur.
rency association. The chief purpose OF
these associations Is to enable an individ-
u bank, a member of the association,
to use its commercial paper, that is,
promissory notes, as the basis of circu-
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.
quired In the first instance to lay the
proposition before the board of managers
OF the association. together with the
securities it offered to pledge. II the
officers of the association should approve
the application, 1t would then be their
duty to value the securities and trans
nit the proposition to the Comptroller OF
the Currency. II in turn that officer
should approve 1t, 1t would then be his
duty to lay 1t before the Secretary of the
Treasury. n II he should be Of opinion
that the conditions contemplated by the
law existed and that all statutory re-
Quirements had been compiled 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-hve pei
centum OF the cash value of the sectiri-
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 lndemni-
fy 1t. The evident and confessed objec,
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 al
they might have occasion to need II. Tn,
law fixes the aggregate amount that may
be issued under Its provisions at $500,
600, 600. All notes issued under the pro.
visions of this act are made subject to a
tax at the rate Of s per cent per annun
for the first month, and one per cent pei
month additional thereafter. until a rate
of 10 per cent per annum is reached. TIL
notes issued under this law are known as
emergency currency" and the tax re.
ferred to is imposed to hasten their early
retirement.
| 1nlSt III SUBSTANCE, Is the remedy GER
tain national bankers n Republican
statesmen, acting in cooperation, pro
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 It's
| terms, / venture to say, however, that
while 1t is claimed to be an experiment
tentative and temporary, it has beer
really put out as a feeler. If the people
endorse the measure, IL they fail TO ex-
press their disapproval of 1t, then the
policy IL inaugurates will be continued
1t is the first hesitating step toward
turning u monetary system over tc
the national banks. Movements Of this
kind gather volume as they go. Is II
possible that the American people are
willing to endorse this dangerous depar-
ture? Here, more than ever before, the
government Indicates the sovereign func-
ton imposed upon it by the constitution
of making. mnnaX md nnnfara ihai