Omaha daily bee., 1908-06-01
EMERGENCY

In spite Of apparently hopeless dis
agreement in the early stages, congress
has succeeded in passing an emergency
currency bill with a spectacular wind
IN of the session. AS already pointed
out by The Bee the difficulty in the
way of this legislation arose from the
confused condition OF the public mind
as to the cause Of money stringency
and the proper remedy, a confusion
which almost to the last moment
threatened to throw the whole subject
matter over TO await more deliberate
and careful consideration.
II is believed that the bill passed by
congress will meet public demands for
the time being. There is no room or
occasion for much argument as to
the experimental character OF the new
law. II is admittedly a make-shift
measure-but 1t is also admitted by
all that it eliminates the most obJec-
tionable features of both the Aldrich
bill and the Fowler bill and contains
the only features upon which both
houses could possibly be brought into
substantial agreement. Legislation on
nearly every important question is
necessarily accomplished by compro-
mise, and the new currency law, en-
bodying the essential elements of the
different bills favored by house and
senate. appears to be a practical piece
of legislation designed to meet any
financial emergency that may arise.
Very briefly, the new law provides
for both a bond-secured emergency
currency, as called for in the Aldrich
bill, and an asset currency, which was
the cardinal feature of the Fowler bill
and its Vreeland bill offspring. Elmer
gency currency, to the amount of
$500, 000, 900, may be issued to 80 per
cent OF the market value of state,
county and municipal bonds deposited
with approval OF the secretary of the
treasury. The law also provides that
National Currency Associations" may
be formed by national banks, ten OF
more in a group, with similar author
ity to issue emergency currency based
on commercial paper and other bank
assets, to rs per cent of their market
value. Both forms of emergency cur.
rency are quite as we'll secured as ma.
tional bank notes, but are subjected tC
a tax of 6 per cent, increasing at the
rate of 1 per cent a month up to II
per cent, in order to force retirement
as soon as the emergency ceases.
There is good reason to doub,
whether n emergency currency will
be actually issued under the provis
ions of the new law. 1t is highly i'm
probable that the contemplated emer
gency will be presented in the near flu
ture, If ever, but still the possibility o
!, it's issue should serve to avoid tn,
/ necessity. One argument in favor o
the bill has been that it will operat
chiefly as a faith cure preventive
Nearly every banker has had expert
: ence with the enraged bank deposito
insisting on his money in fear that /
will not be forthcoming, but withdraw
: ing his demands for it as soon as tn
5 tender OF the gold convinces him tina
t he can have it any time he wants II
and II Is at least plausible that tn
knowledge that emergency currenc
4 can be had will forestall all occasio.
4 for it. At all events, the new law con
. stitutes tangible proof that the republI
can majority in congress, charged wit
responsibility for legislation, has cour
7 ageously responded to the popular dc
sire for a currency measure to the e1
! tent that public sentiment has bee
crystallIzed.