The Birmingham age-herald., 1913-10-27
Measure Will Be Considered
Behind Closed Doors By
Banking Committee
MAJORITY IN FAVOR OF
THE VANDERBILT IDEA
Glass in Statement Declares Wander
lips Scheme, II Given Considera-
ton, Will Delay and Frustrate
Currency Legislation

Washington. October 26-Recons ~
tion of the administration cuk Il
bill begins tomorrow behindk =.
doors in the Senate banking cot -.
The issue is clearly drawn bet lie
bill as passed bS tile Hous< he
central bank plan, proposed res-
ident Frank A. vanderlip Ma
tional city bank of New yorR.
backed by President Wilson's expressed
uncompromising opposition to the Van
derlip plan, and renewed support from
administration supporters will emerge
triumphant from the Senate commit
tee or whether a middle ground Will
be found between the two measures
is the next question in the situation.
The Senate committee begins work with
a majority of its members admittedly
favoring the vanderlip idea Admins
tration supporters. viewing that fact.
QttlaIt A0al SUCH Il intdSuTe COuiQ not
be passed in the House and that the
committee. therefore, must work with
the administration bill as basis, pre-
serving its fundamentals if currency
legislation is not 10 be idefinitely de-
layed
Glass Issues Statement
Chairman Glass of the House COM
mittee. one of the trainers of the ad-
ministration bill. issued statement
on the vanderlip plan. 1t was practi-
cally as follows 81 have somewhere
read that in England--or maybe it was
in scotland--they used TO have an an
nual fox hunt. at one stage of which.
with Reynard hard pressed, red her
ring ss<ss arawn across -taae trail 70 di-s
vert the pursuit and give the fox an
other chance. OF course, what is pop
ularly styled the money power in this
country is not foxy, but would anybody
dream of suspecting Mr.. Vanderlip of
being in the red herring business?
eYet it happens to be a fact that
the House currency bill is designed to
correct the radical defects of sys-
tenn under which concentrated wealth
has ruled the nation; and. likewise, it
happens to be fact that the Vanderlip
scheme is projected at the eleventh
hour of congressional consideration
with the hope of indefinite postpone
ment of currency legislation should the
scheme be given serious attention.
IF Mr.. Vanderlips scheme was not
actually designed to delay and Illustrate
currency legislation, 1t will, if given
consideration, have that inevitable eff
feet.
"On July "a. Mr.. vanderlip wrote me
a letter yoicing the protest of him
self and other bankers against GER
tain provisions of the House bill and
1 wonder that he had soon forgotten
with what vehemence he assailed that
feature of the measure which involves
government control. He declared the
principle to be practically inexpedient
and fundamentally wrong. The objec-
tion,' wrote Mr.. Vanderlip, is not to
the powers granted to the federal re-
serve board. but the hands in which
they are placed Asserting that both
financial and political history furnish
ample illustration of the danger, the
ineffectiveness, the inadequacy of po-
appointed boards Mr.. Van
derlip went to the extreme, by saying:
If ssch a board as is proposed were
formed by appointing the seven lead
ing bankers of the United States, who
ever they may be, and these men be-
came dissociated from the daily con-
duct of actual affairs and sat in Wash
ington directing at arms length the
operation of the several reserve banks,
they would very rapidly lose the power
to direct wisely. 1t seems to me that
the only proper method of control muse
be through a board composed of prac-
tical bankers. in direct touch with the
current business. who are selected for
short terms by the member banks
I'm direct contravention of this po-
sition, Mr.. Vanderlip and his Wall
street associates come here at the last
hour, flinging consistency to the winds
politically appointed board,
not one member of which is to be Sc
lected by the stockholding banks, but
all by the President of the United
States. Mr.. Vanderlip in July object
ed to the long term provided by the
House bill. but now in October he
would stretch the term.
"Mr. Vanderlip, In his testimony be-
fore the Senate differentiated his bill
from the House bill in several import
ant features, among them: Uniform
nationwide discount rate instead of
regional discount rate Three months
ago Mr.. Vanderlip, in his letter highly
commended the House bill for its SUI
periority to the A1drich scheme in the
demns the House bill in contrast with
his own plan. / again quote from his
letter of July "a:
"'In one way the system of regional
reserve banks has an advantage over
the national reserve association pro-
posed by the national monetary com
mission. The plan for national re-
serve association provided that there
should be a uniform rate of discount
the United States The pres
ent plan for regioifal reserve banks
contemplates that the discount rate viii
vary in different sections of the coun-
try at the same time. Such variation
of rate is sound banking.
IF variation of rate as provided in.
the House bill was sound banking in
July. how does ii happen that suni-
formity of rate in the vanderlip scheme
is sound banking In October?
I'm his letter to me last July, Mr..
Vanderlip accentuated the utter unde-
STABILITY, in his view. of any radical
departure from the existing national
bank act. and warned the House com
mittee that unless Legislation should
be made attractive to the national
banks they would abandon the sys-