New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-10-20
WILL CONTINUE IN DEMAND
Secretary Writes Banker He Is
Confident Administration
Measure Will Benefit
All the People.
From The Tribune Bureau.

This opinion of Secretary McAdoo Ia
vce-president Of the State National Bank
at Little Rock. Ark. which was made
public this evening. Mr.. McAdoo asserts
that he does not charge that such appre-
hension as prevails Is due to malevoent
reports, but suggests that perhaps 1t is
due to ignorance or TO the undue zeal OF
persons or interests opposed to the cur
rency bill"
This Is no time 10 take counsel Of
foolish or unfounded fears" says Mr.
McAdoo. but II is a time when every
citizen, regardless OF class or reputation,
should periodically support the govern
ment in it's efforts to correct the manifest
defects and abuses OF our financial sys-
TEN and to give It greater stability and
security"
Believes Bankers Will Accept Bill.
Mr. McAdoo expresses the belief that
the bankers will readily accept the bill
and enter the new system declaring that
ne has mo sympathy with those who say
the bankers are so lacking In patriotism
that they will refuse to accept and obey
law enacted in the interest OF all the
people OF the country"
The letter to Mr.. Duncan says:
II have your letter OF the 18th instant.
in which you inclose copies Of a circular
issued BY bankers OF ST. Louis in refer
ence TO the per cent bonds. The state
ments OF this circular are inconsistent
with the provisions OF the pending cur
rency bill. | am surprised that repu-
table banking house would Sponsor a cir
cular disclosing such lack of informa-
ton upon such an important matter I
think you may take II for granted that
no currency measure is going TO be
passed which deals unjustly with the 2
per cent bonds II you have read the
pending measure you will see that the
government is dealing more than fairly
with the holders Of these securities. The
bill contains the following provisions:
F'irst-That the holders OF the Is may
exchange them for per cent bonds with
out the circulation privilege, provided the
entire amount exchanged III any one year
shall not exceed ) per cent OF the out
standing ~. This is a privilege granted
to the banks, which they may or may not
exercise as their interest dictates. Ger
tainly Il is not disadvantage to have
this privilege.
'Second-That at the end OF twenty
years all the outstanding 2s shall be paid
at par and interest As It now stands. the
per cent bonds are radeemable after
1880, at the pleasure OF the government
only. They are, therefore. irredeemable
so long as the government does not choose
10 pay them. The bill gives them def
mite date No one would be so rash as to
claim that this Injuries their value
Approximations Not Justified.
81 cannot understand why any national
bank should sell It's bonds at present quo
tations. Certainly there is nothing in the
pending legislation to Justify such action.
My attention has recently been called to
items appearing in various newspapers
and TO statements in circular letters pri-
vately distributed calculated 10 cause APP
prehension about the , per cent bonds.
Il do not charge that this is done for
10 ignorance or to the undue zeal OF per-
sons or interests opposed TO the currency
bill / am not, however. interested in
motives I am concerned with effects.
THE effect OF all this seems to be the
creation Of belief on the part Of a
few nervous people that the currency
measure is so bad that numbers OF the ma
tiona banks will go out OF the system II
the bill should be passed. and that large
amount OF Is will. as result. seek n
market. that the market will be too mar
row to absorb all the offerings, and that
the price may therefore 20 very low.
"A reasonable amount OF reflection
should satisfy any one that there Is no
danger OF this eventually | am quite
certain that every national bank will low
ally and periodically accept the pro-
visions OF the new currency measure II
It becomes law, and | think II is re-
Election upon the bankers to say that
they will not Every day bankers from
different parts OF the country visit the
Treasury Department They express
themselves with great freedom. | haye
yet to find one who has determined TO
quit the national banking system IL this
measure is enacted.
IF banker sells his 2 per cent bonds
upon the mere apprehension that enough
national banks Will go out Of the system
to force large volume of these bonos
on the market, he Is simply taking coun-
sci OF unreasonable fear.
The Is Will Continue in Demand.
Even il a number OF the banks should
retire from the system. very much
larger number will undoubtedly remain
I'm It, and since the banks that remain
will require larger amount of bonds to
supply the deficiency of circulation caused
by those which may retire. II is reason
able TO believe that there will continue
to be a large demand for government 2s
10 meet the needs OF circulation. The
bill does not deprive the 2s of the cir
culation privilege. 1t leaves 1t undis-
turbed. Every national bank may con-
tinue to buy the 2,per cent bonds and
take out circulation against them to the
full amount OF its capital stock, as pro-
vided by existing law.
"The present market quotation for gov
eminent % should not be taken too seri-
ously. II does not indicate real value.
The president of one Of the largest South
ern banks was In my office recently ard
told me that he desired to buy sls5.00o Of
the q. He said he was assured by New
York bankers that II he gave this order
to purchase at the market 1t would re-
suit In advancing the price several points.