The Washington herald., 1913-10-22
The OPEN FORUM
SUGGESTIONS FOR
BANKING COMMITTEE
Points to Be Considered as a Separate
Measure Before Adjourn
ment Of Congress.

To the Editor: Thus far this admins
tration has outdone the Democratic ad-
minlstration of twenty years ago and
the Republican administration of six
years ago; there has been no panic.
However many bankers are doing now
that which, il ii is not stopped by re-
lieving their minds OF apprehension. wiz
bring the country to the verge Of panic.
Their fears can be quieted. Is II not
worth while? On October ststed and
proved to the Senate Banking and Cur
Iency Committee that some New York
bankers caused the last panic. Hear
ings, PIP. 16sl-9 The story is interesting.
| Just six years ago. at a late hour on
Sunday night. October 20. 1907, the Clear
ing House committee assured the press
associations that the Heinze, Morse, and
Thomas interests had been eliminated
from the banking organizations of New
York City. This had been done at a
secret meeting In the Clearing House.
An interloper in search OF news had
gotten in and stayed When the bank
ers proposed to eliminate three bank
presidents he jumped up and said: IF
you do that there will be a panic"
Some one replied: TT viii all be over in
three days" The -anic started the next
morning.
Under the influence of resentment or
fear bankers sometimes act indiscreetly.
At present they fear a decline in the
market value of the government 2 per
cent bonds which they own. Suppose Con-
gress passed a law that would bring
these bonds to par and keep them there.
All this fear would cease. ! argued be-
fore the Senate committe that Congress
should pass such law and go home.
While awaiting my turn to address the
committee. / had attended their hearings
for two weeks and found the members
generally agreed to take proper care of
these bonds. Now, the Glass bill, as II
passed the House. would give national
banks 3 per cent bonds for their 2 per
cents-that is. make them a present of
SAG, 600 900. a tip of more than was mis-
appropriated by the Tweed ring This ex-
tzavagance is only one defect in a bill
that needs thorough oyerhauling. Its pas
sage at this session Is impossible as q
whole. But section 10, relating to these
bonds, could be amended and enacted into
law at once as a separate measure. a
model of financial legislation.
Before adjourning sine die Congress
should pass short act covering these five
points, which. from my observation,
should say, the Senate Committee on
Banking and Currency could readily agree
on:
L The issue of gold certificates on a
80 per cent reserve-that is. 81 in certifi-
Gates for every dollars worth OF gold
owned by the government. (Shafroth bill,
S. 30f1)
2. The purchase by the Treasury of
per cent bonds at par whenever re-
quested to do so by any bank that has
outstanding circulation secured by them,
and the redemption in gold certificates
of the outstanding notes as presented to
the Treasury 1Owen bill. S. 2SSs).
5. A repeal of the law, authorizing
the Comptroller of the Currency to re-
quire additional security for national
bank notes outstanding when the 2s
are below par.
4. A grant OF authority TO the Secre-
tary of the Treasury, in times of emer-
gency. to rediscount for national cur
rency associations. clearing house ASST
Citations, or banks upon commercial pa
per and other securities.
5. No increase of legal tender paper
money.
Every dollar of currency issued under
such a law would have 80 per cent of
gold behind 1t for its redemption In gold
on demand. This law would provide all
the funds needed to keep the 2 per cent
bonds at par and all the additional cur
rency required in an emergency.
JAMES C. HALI.OCK. ,
Washington. Oct. 20. 1913.