Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1909-01-16
ROCKY ROAD FOR BILL
Postal Savings Bank Measure
Stands Little Chance to
Be Passed
CENTRAL BANK WANTED FIRST
BANK WANTED FIRST
Senator AIdrioh, Who is Power on
Currency Legislation, Desires An
other Reform First, With Postal
Banks suppIementins the System
Big Problem confronts Law Makers.
Especial Correspondence.)

Washington, Jan. 16.--Recause OF us
strong leaning toward the idea of cur
rency reform with a central bank of is
sue at It's foundation. Senator Aldrich
does not want a postal savings panK
bill passed at this session OF congress
The Rhode islander, who by common
consent Is the first congressional au-
thority on currency topics, believes
that properly organized postal pank
system would become one OF the great
and reliable stays of central bank.
But until something definite Is deter
mined as to the possibility of getting
a central bank measure thru congress,
the senator feels that 1t might be
mistake to establish postal SAVINGS
system which later would be found dif-
flcult to work over into the form OF an
adjunct to such q bank.
This, on the authority OF people VINO
have been a good deal In conference
with Senator Aldrich about the pos,al
savings measure. Is the explanation OF
his present attitude. He Is said to De
friendly enough to the postal pahh
idea; but before that he favors a re-
form of the currency system, am
wants to be certain that the postal
bank establishment will not add one
more to the manifold complications OF
the present patchwork currency
scheme of the country, and tby that
extent Increase the difficulty OF impos-
Ing a central bank, with a general pow
or OF issue, upon the present financial
fabric.
What System Means.
What the postal savings plan would
mean to a central bank system does
not need to be explained in further
detail than to say that the authorities
in congress are convinced that inside
of three years the aggregate OF posta'
bank deposits would reach a blllloh
dollars. With the tremendous potency
of this widely extended scheme Oh
gathering in deposits, which of course
would be centered in the central bank,
1t is apparent that the new institution
would Immediately occupy a command
ing position. This does not mean that
the postal bank deposits would be re-
deposited in the central bank and thus
drawn to the city which might become
its seat. 1T does mean, however ths.e
the central bank would unquestionao'y
have the function OF general enginery
and management of the national nm
ances, and that the conduct OF the pos
tai savings business of the government
would be one Of these functions.
Valid Objection to Present Bill.
Senator Aldrich has specific. objec-
tons to the present bill. They are prac-
teal, and entirely aside from the con-
stitutional objection which has con-
cerned some senators. For example, he
doubts the advisability of leaving the
administration of the funds to the
postmaster general. as the measure
proposes. The responsibility for man.
aging billion of money would present.
ly make the postmaster general as
powerful a factor in the national fin
ancial structure as the treasury's head
now is. There would thus be two cab
met officers of immense powers In con-
nection with financial matters. Many
people think politics and finance are
already too closely related, because OF
the great power lodged In the secretary
of the treasury Thus the conserva-
tives on this subject feel that there is
danger of distributing a vast financial
power among cabinet officers who after
all will be creatures of politics
Board Of Managers Favored.
Accordingly, Senator Aldrich would
like to have provision of a board Of
directors or governors, to administer
the funds of the postal bank. 1t is
assumed that in a time of war or other
great emergency, the government would
employ the bank as an fundamentally
for borrowing money. That is, 1t would
use the deposits and pay interest on
them. If the fund were administered
thru central bank this would be a
simple process, because bands of the
government would be deposited in ex-
change for the moneys thus used. The
borrowing power of the government
provides the constitutional alithoriza-
ton, in the minds Of some of the best
authorities, for postal bank. No bet
ter investment could be found for the
funds than the government bonds.
Moreover, if the central bank were
given a monopoly of issuing power, the
market for per cent bonds at any
thing like par would be gone They
are desirable now because of their
function as a basis for national bank
circulation But the bank of issue
would destroy that use, and bonds
would fall to much lower figure I'M
less some new method of raising money
were divided. The postal bank ex-
atty provides this.
Problem is Big One.
In the opinions of many public men
who believe the central bank to be the
ideal solution of the currency problem,
there is grave doubt whether such a
tremendous and fundamental change
can be made without undue and dan
gerous shock to financial relations in
the country. How to frame legislation
which shall establish such a bank and
yet not disconcert all existing financial
relations and organisms, is the prob
lem. Many men have given up in de-
spair and turned to the other cur
rency plans Senator Aldrich is not
one of these. He believes it is quite as
possible for this country to organize
a central financial institution at the
top of it's currency system, as it was
for Germany to- do the same thing. To
accomplish this he would consider the
greatest work of his public career;
and he has an ambition to succeed
with this task, and to leave a scientific,
solid and simple financial system to
the country as monument to his serv-
ice in congress.
Disagree With Aldrich.
The advocates of the present postal
savings legislation believe that Sena-
tor Aldrich overestimates the difficulty