The sun., 1913-10-14
M'AD0O CALLS FIGHT
ON BONDS CRIMINAL
Defends the L. :. , Per Cents.
in Receiving Country
Bankers.

WASH iNGroN. oct. i3--Ren.wtns his
attack on what he considers an ATTEMPT
to depreciate the value OF the 0overn-
nent per cent. bonds Secretary McAdoo
declared to-day that the publication of
reports that these securities are below the
danger point is ''unpatriotic and In a sense
criminal
The Secretary made this statement in
the course of running fire of questions
and answers which took place in his
Office when he received a delegation of
country bankers authorized by the Ameri-
can Bankers Association to represent it
before the Senate Committee on Banking
and Currency in the matter of the Ad-
ministration currency bill.
The bankers showed uneasincss as TO
the outlook for the . per cents. They
pointed out that country banks held the
ma jOrity Of these securities and therefore
would bear the brunt Of any great depre-
citation that might result from the enact
ment Of the currency bill. Mr.. McAdoo
vigorously undertook to defend the section
Of the bill with regard to the refunding
of the bonds. which now secure national
bank currency.
The Secretary said there was no justi-
fication for declaring that the bonds had
reached the danger point because they
were quoted last week at 94A.
"Ninety-four and three-uuartcrs is not
the danger point" he said. and 20 would
not be the danger point as far as the
value Of the bonds to tn, national banks
10 concerned"
The Secretary declared that the falling
of in the price OF bonds should not cause
the bankers to lose confidence in their
holdings or to consider dispOsing Of them.
For, the next twenty years. he said,
under the provisions Of the currency bill
as it now stands. the circulation privi-
leses OF the bonds will remain un!m-
Il ..f Nhnt
will be redeemed by the Government. He
expressed tho opinion. as he has before.
that the value Of the bonds would be
strengthened BY the new law In that with
/ its enactment the per cents. would be-
come retleemable bonds instead OF un-
redeemable bonds. as they now are.
The Secreta-y declared that he had
no intention as head OF the Treasury De
partment and Of tn. present fiscal system
Of the country OF demanding additional
security for the national bank currency
because Of the depreciation in the mar
ket quotations on the bonds.
He asserted that nothing had arisen
which ought to impair the confidence in
the ability Of the Government to meet
its obligation in regard to the bonds.
a Southern banker then said that
under the contract by which the per
cents were purchased from the Govern
ment by the bankers the bonds had car
ried with them the circulation privilege
to be exercised under the provisions set
forth in the charters issued under the
national banking act II was his idea that
this contract conferred the circulation
privilege permanently.
Mr.. McAdoo reminded him that the
national banking act permitted amend
ment Of these banking charters without
the enactment OF a new currency law
Another doubling banker asked the Sec
retary how he would advise a banker
whose charter soon would expire and who
would thus find II necessary to liquidate
on his assets. including his per cents
Should he sell his bopds at their present
deprecated market value. based appar'
emily on the earning capacity OF the bonds
aside from the circulation privilege fea-
ture?
The Secretary believed such banker
would do we'll to sell his bonds to some
one about to enter the banking business
Several OF the country bankers ex-
pressed the belief that the bill would not
be found adapted to their needs because
as q general thing the asset paper they
handled would not be of tho character de-
manded as security by the Glass Owe1,
bill. Their paper usually was far longer
In maturing than the short time paper de-
scribed as "commerctal' In the Admins.
tration measure.
To this the Secretary replied that the
authors OF the bill were keeping in mind
the needs Of the country as a whole and
not one single section of the banking pro.
fessiOn.
The Secretary appealed to the bankers
on patriotic grounds to support the Glass
Owen bill.