New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-10-20
Currency Legislation Talk Is
Weeks Chief Attraction.
IMPORTANT GATHERING
Ex-senator Aldrich Picks Flaws
in Proposed Measure-Other
Criticisms - Invest
ment Markets.

result may De W plONiNc q Diii eN>NfN
able to both the banking interests and
the administration that will fill the re-
quired needs Of money and business
The meeting of bankers, educators ana
business men under the auspices or the
Academy of Political Science during
the first three days of the week ended
with an annual dinner, at which ex-
Senator Nelson w. Aldrich, the father
of the much discussed Aldrich bill, was
the principal speaker. There was
wider range Of discussion on the meas
ure than has resulted from other gath
crings of a similar purpose.
1t is open to question whether IN
view Of the personal element that crept
into ex-senator Aldrich's remarks his
criticism of the bill was as forceful as
il otherwise would have been. but some
Of his remarks will be accepted by
students Of currency legislation as
sound economic doctrine.
One paragraph touching on the
method proposed by the government TO
afford relief TO banks in communities
in trouble carries an indirect note Of
warning that is worthy of special at
tention:
THE government cannot afford TO
maintain large surplus for the pur-
pose Of transferring It from one section
to another for relief purposes. This
method would be equally perilous with
the other. Transactions OF this char
acter. as we'll as the enforced dis
counts, would appear in the weekly re-
ports Of the reserve banks, and the
knowledge that a bank in any section
Of the country was in such need OF as
sistance as to demand help on such
terms would be likely to cause run
upon the advertised institution, and
the attempt to relieve might not only
prove futile but productive Of serious
results. The suggestion of these ques-
tionable methods Of making the re-
gources Of one reserve bank availa bic
for the relief Of another discloses the
inherent weakness Of the plan. To be
effective the capital and resources Of
reserve banks must be concentrated
under the control of some central or
ganization."
Another point dwelt on in Mr.. Aid
rich's talk was the establishment OF the
Federal Reserve Board which practi-
cally would be a government central
bank, with powers greater than those
of any central bank in the system, and
which might be able to control cleo
tons and insure the success of a poll
teal party, but in times of stress would
have no power to preserve public or
private credit. It's standing would be
fixed by its importance as political
machine rather than force in financial
circles. The currency problem Is not
or should not be a party measure, as
the issue is a national one affecting all
parties and all classes Of people.
The bill. in its present form, has been
pronounced by President Frank Van
derlip, Of the National City Bank, TO
be so per cent good, and IT is the 20 per
cent Of bad toward which the attention
of all interested should be directed in an
endeavor to eliminate the parts of the
measure that threaten to disturb the
financial and business interests Of the
country. Mr.. Vanderlip has suggested
the elimination Of the Secretary of
Agriculture and the Controller Of the
Currency from the Federal Reserve
Board and the appointment Of six citi-
zen members by the President. Also
the appointment of an organization
committee outside the Cabinet and an
increase OF dividends on federal re-
serve bank capital from ; per cent to
g per cent. with all profits over that
amount to go to the government in
stead of only GO per cent. as now pro-
vided. A refunding Of 2 per cent bonds
and 3 per cent one year notes, renewal
at maturity during a period Of twenty
years and a restriction of commercial
paper for discount by eliminating all
paper for speculative transaction are
among the changes he would make.
Professor jeremiah jerks, of the Uni
yersity of the City Of New York, urges
the elimination Of the term lawful
money" and declares that unless the
reserve back OF the notes is gold
large expectation of gold will result and
confidence will be destroyed. He favors
the use of bank notes rather than gov
eminent notes for the elastic part of
the currency, although he thinks the
proposed form Of note might be salts
factory.
At no other period in the history Of
the United States have the people been
treated to a wider discussion of the
currency problem. than during the last
several weeks, and the subject grad
ually is being better understood by
many thousands of business men who
formerly had very foggy comprehen-
sion Of currency reform. The study Of
the subject is still in its primary state.
but the intense interest shown by the
public at large indicates that 1t is only
question of time when a bill may be
crystallized which will meet the de-
mands of the United States and be free
from several of the objections that APP
pear to be incorporated in the present
proposed measure. No one disputes
that the country is in need Of relief In
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