Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1908-01-11
VOICES OF THE PRESS.
AIdrieh Emergency Currency Bill.
(Philadelphia PresS.)

SGIldtOI AiuI I'LL anu lilS AsSPNci'~'s'-
associates on the Senate Finance COM
mittee have presented to the Demo-
Gratis on the committee, to the Senate
and to the country a measure when
meets the one need made most clear
and most visible during the hnanclai
convllsion Of October and November.
1t IS now known that the currency
famine of the period was neither
figure nor due to the banks. western
and rural banks. by drawing on their
deposits III reserve and central reserve
cities, doubtless made the stringency
more serious, but this was not all.
The national banks directly lost sl9o,-
900, 900 OF lawful money. boarded by IN
dividua.s. The proof is clear and unan-
swerable. The national banks had on
August 81. in specie and legal tenders,
lawful money. SOL 623, J3S. On De-
ccmbcr 3. 1907, they had $60S,is4.-
1871. This was a direct loss of si0.-
SIS, 1856 In the same period there
was 900 Of gold imported. Be
tween August - and December the
Treasury increased its deposits by SI9.-
SIS, yeS. Here was an addition in gold
coming to View York and lawful money
deposited in the banks by the Treasury
to the amount of $155, 418.96S. In the
same time the banks lost SiO,S3S, 1856
During this period in round numbers
1896 900, coo disappeared from the ma
tion;I banks alone.
In addition, the New York trust COM
panles lost $13,0000C0 The national
banks also took out during this period.
To in cir.
culation, $52, 161, 523. This disappeared
without adding to national bank cur
rency holdings. Since December 3, $780,
10000 has been imported in gold, max
ing total gold imports 100000 since
last August. If all these be added to-
gether. the enormous total is $3O4,O00,-
900 Of currency, in gold. legal tenders
and national bank notes, which has
been added to the circulation outside or
the banks and boarded by individuals
during the last four months. Two
thirds of this is known to have
flowed through the national banks. The
rest has gone directly to individuals as
gold was imported.
currency famine" was inevitable.
The surprise is that it was not far
that only eighteen national banks col
lapsed. During this crisis banks need
iry money with good securities took
them to the Clearing House Commit
tee end obtained Clearing House
certificates to such amount as the
committee deemed wise. If these Sc
curities were Of the grade laid down
by the measure, a standard close to
the Massachusetts, Savings Bank Act
bank could under this measure
take them to the Comptroller of the
Currency and on his approval obtain
notes to the amount of 70 per cent.
of their market value.
This adds q measurable amount OF
elasticity to the currency in circulation
during strlngency. 1t does not add as
much as an asset currency, but no
proposition for an asset currency could
possibly pass the present Congress. The
proposed measure does no accept as
wide range of securities as did Clear
ing House committees. This new
circulation would pay q tax OF
per cent year. besides x of 1 per
cent. yearly on that secured by per
cent. bonds and ! per cent. year on
currency secured by bonds of higher
rate Of interest. Clearing House GER
tifici,tes pay per cent. interest.
Practically, the Aldrich bill takes the
present Clearing House machinery in
crisis and used only in crisis for the
issue of Clearing House certificates and
places it primarily under the control OF
the Comptroller of the Currency. Banks
with securities such as are required can
go to him and get currency. This cur
rency will be payable by the United
States, part of the tax providing this.
This circulation can be issued to the
amount of $25OOOo,0 900, OF about $50
O00, 900 more than the drain on the ma
tional banks.
This should be adequate. 1t is more
of emergency currency than Germany
has ever needed twice over. The issue
will be prompt, because it is carried on
through sub-treasuries. 1t can be is
sued at any time. 1t does not call for
the slow action of Clearing House COM
nittces. delayed in New York d week
after certificates were needed, causing
several failures.
A better bill could doubtless be
drawn. There never was q currency
measure of which this was net true
But no better measure can be passed
and Congress should pass this without
delay.