The Washington herald., 1913-11-30
M 'ADOO OFFERS
REFUNDING Plan
Senators Discuss II, but Are
Not Agreed as to Its
Provisions.
REFERRED TO OWEN MEN
Latter viii Report to Session Of Demo
cratic Caucus Tonight All
Questions at Issue.

| A new plan for refundlng the 2 per
cent government bonds which are now
the basis Of national bank notes vas
presented TO the Democratic Senate eau
Gus yesterday afternoon as coming from
Secretary McAdoo. Senators were moi
agreed as to Just what the MeAdoo plar
provides. A number Of other suggestions
of substitutes were made and much con-
fusion resulted. and finally the whole
subject-matter was referred back to the
Owen wing of the Banking and Currency
Committee. with instructions to report
on some plan
A member OF the Banking COMMITTEES
explained the McAdoo plan as simply the
retirement OF the national bank notes,
the taking over by the government OF
the 2 per cent bonds. and the issuance
In exchange therefor OF a like amount
of Federal reserve bank notes Thia
plan contemplates substituting the re-
serve notes for the national bank notes
as circulation.
Another Senator understood that the
McAdoo plan simply provided that Treas
ury notes bearing per cent interest, to
run for one year and renewable at the
option OF the government for thirty years.
be exchanged for the 2 per cent bonds
when the latter are surrendered by the
banks, following the retirement Of their
national bank notes
Wide Variance of Opinion.
The McAdoo plan, as this Senator un-
OF only about S25.0o0.OOO worth of the
bonds annually, while the Owen bill
plan, the Hitchcock bill plan. and all
the others make the amount about $36,-
O0o.00O. which would retire the entire is
sue within twenty years. A wide vari-
ance of opinion was disclosed on the
refunding proposition
The Democratic Senators were In Sses-
sion four hours yesterday morning.
about two hours in the afternoon, and
again until a late hour last night. in an
effort to complete all Of the unoontested
parts of the Owen bill in time to make
report to the Senate tomorrow. 1t
was the plan to hold no session during
the day today. but to have a night ses-
sion. The six Senators who drew the
Owen bill will take up the matters that
have been referred back to them at a
meeting this morning, and are under IN
structions to report back to the caucus
tonight on all the questions at issue.
There appears to be little doubt that
this committee will report in favor Of
vesting in the Federal reserve board
authority TO create any number Of
regional reserve associations between
eight and twelve. There Is a difference
of opinion as to what action will finally
be taken on the question of the use Of
lawful money in the redemption funds.
Few Changes in owen BflI.
The caucus is following the Owen bill
closely. and only a few changes may be
expected in that measure. Up to this
time no disposition has been shown to
change the reserve requirements fixed by
the bill But it is very likely that the
caucus will finally decide to authorize
national banks to make longtime loans
on real estate security. a feature that
is in the Hitchcock bill, but is not in the
Owen bill The caucus has borrowed from
the Hitchcock bill the paragraph guar
anteeing national bank deposits. The per
cent of dividends that probably will be
fixed by the caucus will be the same as
the Owen bill. namely per cent.