The Denison review. [volume] (Denison, Iowa) 1867-current, 1913-06-18
their unused muscles in carrying
burden of whose weight they have no
comprehension.-S City Journal.
CURRENCY ELASTIC NOW,

Why worry about possible none.
stringency either during the summe
or the fall when $5OO.OO0,OOO in cris]
new currency is rep0sing within cas-!
reach of the banks?
The question is suggested by Score
tary McAdoo's formal statement il
reply to queries as to the accessibility
of emergency currency under the AL
Adoo says there are now stored away
in the treasury vaults bank notes tt
the aggregate of half billion dollars
every dollar of which he stands ready
to issue to the banks as emergency
currency under the Aldrich-Vreeland
act. In order to swell their circula
ton by putting out some of this emer
gency currency it is not necessary for
banks to put up government bonds fol-
security. All that is necessary is to
get hold of bundle of state or mu'
nicipal bonds or even gilt edged com.
mercial paper. The security must be
Endorsed by the local currency associ-
alton required by the Aldrich-Vreeland
act Such associations, resembling
clearing houses in organization, have
been formed in all parts of the coun-
try, although the number now in ex-
istence is insignificant compared to
what it mighe be should real emer-
gency appear in sight. Currency
issued under the liberal security pro.
vided by the emergency act is intend.
ed to be retired automatically after
the passing of the temporary need for
it. To this end the special tax paid
increases on a sliding scale according
to the time the notes remain in cir
culation.
Secretary McAdoo evidently has not
offered his reminder of this source of
additional currency with any idea that
much if any of the emergency notes
will be issued at this time. The re-
minder is issued rather with the idea
that it will allay unwarranted appre-
hension regarding possible currency
scarcity in the fall. The recent tight.
ness OF money, international in scope,
plus the increased demand for cash
that will come in marketing the large
crops now Indicated has caused an
impression that real financial strin-
gency may be expected in the fall To
prepare for it some bankers have
adopted a policy of restricting loans,
and building up reserves. This policy,
if widely followed, would give us tight
money through the summer without
waiting for the fall.
II there is to be an extraordinary
demand for money in the fall let the
banks prepare for it by issuing new
currency under the Aldrich-Vreeland
act to cover such additional demands
as may be foreseen. Let them do this
in preference to putting the brakes on
current business to make sure of being
in position to meet the demand of the
future. This, in substance, is the ad-
vice that may be read between the
lines of Secretary McAdoo's statement
Aldrich-Vreeland notes.
The Aldrich-Vreeland act, it will be
remembered, was passed in 1908 on
the heels Of the panic of the preceding
year. 1t represented hurried profiting
by the moral Of the 1907 disturbance.
The moral related to the need of elias
ITCHY in our currency, and the Aldrich-
Vreeland act was adopted to supply
that need temporarily. 1t was in fact
intended to apply to just such a situa-
ton as is fOreseen next fall. The law
expires by limitation next year, which
offers another reason for President
Wilson's desire to get action on the
question of permanent currency re-
form next Winter.-SiouX City Journal