Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1908-02-13
Mr.. AIdrieh On the Currency Bill.

ward presentation of its PROVISIONS,
and has called forth favorable conf
ment in all parts of the country. MT.
Aldricn explained that the new Dill pro-
vides for a possible issue OF S5oo,ooo.-
O01 of emergency notes. They are to be
issued by the national banks and re-
deemed by the United States Treasury.
a,thruyh much the same as the present
bank notes, they may be secured by
CITY. State or first class railway bonds.
This plan follows closely that of for
eign countries to expand the currency
Afr. Aldrich claimed that his bill is
simple. prompt and efficient, and that
if the emergency required it the whole
issue of $500,eO0, 900 could be put into
the channels of trade in forty-eight
hours.
He was Of the opinion that the time
was approaching when the financial
laws of the country would have TO I'M
,lergo a general revision, but he was al
so of the opinion that the present time
was not favorable for such sweeping
legislation.
An annually recurring need" said
Mr. Aldrich, for additional currency to
move crops occasionally creates a de-
lnand in excess Of the available sup
ply, but the serious defect in our none
tary system, as disclosed by our recent
bitter experience, is the fact that We
have no means whatever for providing
the additional issues nece SSary to meet
or 10 prevent panic conditions. Events
having brought this defect 10 the at
tention of Congress iii the most torcible
manner, we can not wisely or prudent
~ fail to give il serious cOnSidera-
ton. 1t is perhaps true that the most
complete monetary system will not
prevent at times the boarding of money
by frightened bank managers or indi-
viduals.
Neither the strength Of our none
tary system nor the extraordinary Ell
forts which were made To avoid this
serious result prevented general
suspension of payments by national
banks, with most deplorable and far
reaching results.
Il believe i to be the imperative duty
of Congress TO provide means of escap,
from another crisis. The expedients
which the responsible officers OF the
government and of the great financial
institutions We're Obliged to adopt in
the panic OF 1907 point the way 10 Ell
fective curative legislation.
There seems to be but one way in
which this can be accomplished. name
ly, by some provision for the authoriza-
ton OF additional notes to be used only
in emergencies
Mr. Aldrich pointed out that the bill
under consideration was one that did
not attempt to rcvolutionize our cur
rcncy system. 1t aimed simply
guard against q recurrence
of panic by rendering Immediate
iy available an emergency cur
rency amounting to 500, 900, 900. It.;
object is to guard against the recur-
renee Of another such currency strin-
sency As upset business conditions dur
Ing tn. crop Inoving period last fan
Bank notes" declared SenatOrAldrich
are essentially government money, the
banks being merely the instrumental
ties of issue. Tie widespread diversity
of opinion as TO the character OF gem
eral legislation to be enacted, and the
further and more significant fact that
there is no considerable consensus OF
r..l ..,l II,
led th,. ,omn,ittec. therefore, to the
conclusion that il is not possible. AZ
this time. 10 enter upon II thorough re-
torm Of our entire currency legislation.
The Commute. felt that il was safer
to follow, III the form of iesisla ton
they should recommend, the experience
of the great European commercial
nations. who have foun,i it necessary
to provide means To meet o. prevent
panic conditions by the extension of
note issues under different restrictions
and conditions from those imposed Oh
ordinary issues.
The committee are of the opinion
that tie bill which they have Reported
answers these requirements.
1t provides for u possible issue in
emergencies of S5o0. oo0.uo0 of national
bank notes, rcdcamabie by the United
states in lawful money upon presenta-
ton 1T tho treasury. The notes Will he
Identical in character and tenor with
the national-hank notes secured by the
deposit of United States bonds. For
the security OF the government the
banks are required to deposit in the
Treasury State. municipal or first
class railroad bonds, Of Il character
ana III amount satisfactory 10 the
secretary OF the Treasury. Upon State
and municipal bonds the bank is en-
titled to receive notes to the extent of
30 per cent of their value, ana upou
authorized railroad bonds, - per cent.
of their value.
Notes for the entire amount of the
issue are to BE- prepared at once and
deposited it, the Treasury or in sub
treasures nearest the place of business
of the different banks. 1t is made the
duty Of the Secretary of the Treasury
to make without DELAY an examination
of the securities which might be availa-
Die for deposit and to notify The banks
Of such as would he acceptable To the
government for this purpose. The
notes are to be distributed by the Sec
rotary equitably among the banking