New-York tribune., 1908-01-07
ALDRICH BILL READY
EMERGENCY CURRENCY.
Outline of Measure TO Be Intro
duced IN Senate To-day.
IFrom The Tribune Bureau.I

Washington Jan 6-Mr. Aldrch will intro
duce in the Senate tomorrow the financial bill
which is to form the basis for the most i'm
portant legislative enactment of this session.
The drsft of the measure, which was submitted
to the Republican members of the Committee
on Finance to-day, meets their approval. and
it is the expectation of its author that it VIII be
referred to his committee. reported back to the
Senate. and sent to the House within two weeks.
although it is appreciated that disposition on
The part of the minority to prolong debate may
somewhat delay its adoption by the upper
house. The measure has been submitted to the
Speaker OF the House, and has received his ap
provai. so that its passage through the House
without undue delay seems to be assured.
The bill provides for an emergency national
bank currency not to exceed s250,000,O00 in
amount, taxed at the rate of per cent and
secured by such approved securities as are ac-
cepted by savings banks under the laws OF
New York and Massachusetts, which to be
accepted collateral at IS per cent of their
face value The necessity of issuing this emer
gency currency, the eligibility of such national
banks may apply for the privilege and the
amounts which each shall be permitted to issue
are left 10 the discretion of the Secretary of
the Treasury, who shall act with the advice of
the Controller of the Currency and the Treas
of the United States.
SECURITY FOR BANKNOTES.
Opinions regarding the advisabiiity of limiting
the collateral for this currency to state. county
and municipal bonds has swung back and forth
since the leading members of the Finance
Committee have had the subject under consid-
Grafton but survey Of the financial field has
revealed the liability of sending these public
securities to considerable premium by too
narrow limitation. and it was finally determined
that inasmuch as first mortgage railroad bonds
and similar gilt edged securities were. every
where accepted safe and sound investments
and were recognized by the laws of Massachu
setts and New York, there was no good ground
for so materially narrowing the basis for the
emergency issue.
Careful investigation of the Clearing House
facilities for passing on the eligibility of
tional banks which desire to avail themselves
Of privileges of this legislation demonstrated
that such institutions had legal status and
could not, therefore. be wisely written into a
United States statute 1t was then proposed
to make the United States sub -treasurers the
arbiters on these subjects, but Mr.. Aldrich has
rejected that scheme impracticable, although
there is a possibility that some such amend
ment may be offered in committee.
Up to a late hour to-day Mr.. Aldrch had
not finally completed his measure which was
still in the form of draft and before he was
willing to say that its important provisions
final he purposed to hold consultation
with the Secretary Of the Treasury regarding
certain details The outlines given, however.
may be regarded as fairly comprehensive ana
reasonably accurate
1t is known by members of the Finance Com
mittee and other influential Senators that many
Western banks are retaining in their vaults re-
ia in legal
and are refusing to advance funds for admitted
ly sound enterprises. These bankers explain
that when the recent stringency occurred in
New York they were suddenly deprived of the
right to draw their reserves; their Eastern
correspondents were unwilling or unable to meet
their demands for cash. and they were subjected
to a severe strain while the Controller or the
Currency was obliged to wink at the refusas
of national banks to honor checks and drafts on
deposits Determined not again to be caught in
a similarly embarrassing position, these bank
ers are now boarding their funds until. in many
instances their vaults contain so per cent and
upward of their deposits, and they are refusing
to make loans except carry on enterprises
already under way.
# is the belief of the4inancial experts of the
Senate and the Treasury Department that as
soon as the AIdrich bill becomes law this ex-
cessive caution the part of the bankers VIII
no disDeIled The bankers will realize that the
danger of another strngency has been relieved;
that should there again occur pinch in the
money market the banks would be able to meet
it by issues of emergency currency, and they
will not therefore fear once more to conduct
their banking business normal lines
While the Senate leaders have been unwilling
TO be hurried into hasty legislation, they nave
after careful survey of financial conditions ana
the most thoughtful consideration OF every
nhase of the situation. determined to enact leg
islation which is clearly in line with the recon-
mendations Of the administration and the sug-
eestions contained in the Presidents message
They believe they have devised the simplest
possible remedy for money! stringencles, and IN
intrusting the drafting of the measure to Sen
ator Aldrich they are convinced that they nave
chosen the greatest expert whose services are
at the nations command.
7. ;s NOT believed that the Democratic mem
hers of the Senate will deem it wise materially
n delay the passage of the bill. Senator Cul-
bcrson the Democratic leader. is regarded py
hi co11ea rres on the other side of the chamber
&c far seeing and wise leader, and confidence
:; axnrassed that SO far as lies in his power
he will curb the loquacty of some of his more
radical brethren and seek to facilitate the pas
sage of measure which is destined to remove
tho last vestge of possibly threatening imam
cial depression
Sneaker Cannon has assured the Senate lead
ers that despite the unpromising aspect OF the
House Committee Banking and Currency he
oan assure prompt and satisfactory action on
the Aldrich measure. The Speaker has ~oeen
consulted freely and his opinions as a banker
have been embodied in the bill, Under the
powers of the Speaker and the Committee on