Evening star. [volume] (Washington, D.C.) 1854-1972, 1910-03-04

saying that ne would come to II In the
close OF his argument.
Senator Root then launched into 8
dramatic description OF financial panics
ence in professIonaI and responsible posi-
lions and through which he had gon<
since the panic OF 1879. He pictured the
growing distrust and the several stage:
Of the panic. from the impairment Of con
up OF deposits until. winding up like q
fire panic In q theater. the strongest
crushed the weakest.
When Panic Comes Again.
when panic times come, as come they
will" said Senator Root. where will this
bill leave the government OF the United
States with five hundred millions OF the
peoples money for which the government
is responsible scattered in twenty-five
thousand banks and the banks unable to
pay3
The government Of the United States
will suspend. the credit of our country
will vanish, and our investment and
financial system will be demolished"
Senator Root declared that during all
previous panics the government OF the
United States had stood mistaken, and
Ii had retained the confidence of the
world for the reason that behind its OBJ
legations 1t had tangible resource. and.
furthermore. because at any time II could
sell its securities. and that meant get
ting cash Behind the three hundred and
fifty million dollars of outstanding obli-
cations he said. we have first the work
ing balance I'm the Treasury: second. we
have one hundred and fifty million dollars
In gold coin and bullion IN the Treasury
vault. and. third. the Secretary of the
Treasury has authority to issue fifty
millions more in per cent certificates.
This BILL" declared Senator Root,
proposes against these Ave hundred mil
lion dollars In demand obligations to put
nothing that the government can lay Its
hands on with Certainty. What has en-
abled the. United States to come to the
rescue In previous panics was its power
to issue and sell bonds OF the United
States. That power exerted has stopped
The authority TO sell bonds by the
government is the one and only life pre-
ator Hoot, and. answering the query of
Senator Cummins. he declared that II
the postal savings funds were invested
In government bonds the government
could get cash In the markets OF the
world at q moments notice.
In response to questions by Mr.. C1app
Mr.. Root said his amendment contemplate
ed the investment OF the postal funds In
bonds 10 be issued hereafter. He said he
hardly thought the board I'd. would approve
per cent bonds as some had feared.
Opposes Both Amendments.
Senator Owen said he was opposed to
both the Root and Smoot amendments.
and that he was sure the bin would be
constitutional without any such amend
ments. He made light Of suggestions that
ths people ever would become afraid of
the government. and also said that the
people were not afraid Of banks except
those of q speculative character.
Appealing for candid treatment Of the
question. Mr.. Carter. in charge Of the
should be invested in government securi-
ties. but little harm could result. as most
of the funds would be composed Of money
now boarded.
Mr. Carter supported MI Roots view
tai funds II scattered In the banks
throughout the country.
Means Defeat Of Bill.
Senator Carter made q vigorous assault
on ths amendment proposed by Senator
Curnmfns. which prohibits the with
drawal from the banks Tor investment In
goveynmsnt securities IN no other eXieen-
CT than war.
The insertion Of such an amendment. he
predicted. Will defeat the bin. and those
who vote for II. he warned, vote against
the ball Tho amendment proceeds on the
theory. he declared. that the funds cannot
be used by the government whose credit
guarantees them except when the for
egn invader enters.
He argued that the protection of the
credit Of the government demands that
the President be given authority to use
the postal bank deposits In other exigsn-
cies than war.
The milk of the cocoanut, he declared.
Ia that those opposed to the broader pro-
vision fear that the trustees OF the fund
would buy up 2 per cent government
bonds. thus relieving the banks of those
secudities and allowing them to buy per
cent Panama bonds. For the trustees TO
10 that, he concluded. would be for them
to violate the law and the trust imposed
upon them.
Subtle Scheme Of East
Senator C1app of Minnesota advocated
the amendment offered by Senator Cum
minis.
IF this country has reAehed the finan-
csal crisis pictured by the senator from
Montana" he said. at is time for some
amateur to take the wheel. II we have
reached the point whore We must have
recourse to the savings of the women and
children. tho workmen and the miners
to rescue the nation. IL IL time some one
else took hold Of the administration OF
legislation"
Referring to the platform pledge for a
postal savings bank. Mr.. Clapp said
that this bill was far different from H.
There will come a time said Mr..
Clapp. when the people will no longer
take excuses for broken party pledges"
He said 1t would require an acrobat
70 keep up with the changes this bill
has undergone.
"a more subtle scheme was never
designed" he said "for taking the
savings OF the west and transferring
them to the east without a correspond
ing obligation"
Senator clay's Objections.
Senator Clay Of Georgia presented many
and various arguments against the smoo,
amendment. which allows the investmen,
Of tho fundB in government bonds In time
Of war or other iexigency, in tie discre-
ton OF the President. He contended that
this enabled the President to use thu
funds In any way he saw lt even for
current expenditures. II the appropria
tioa bills called for moro money from,
the Treasury than there was In II. he ar
gued, the amendment would allow the
President 10 use the postal savings de-
posts 70 meet the deficits
"A postal savings system" continued
6snetor Clay. 'is not intended to swell
the volume of money In the United
States Treasury. but to help tho poor and
encourage economy and thrift
Controverting Mr.. Root. Senator Boraf
be q constant threat 20 every bank tax
ing the postal money.
Mr.. Borah said that those who would
divert the legislation from the purposes