The Washington herald., 1913-11-14
WOULD REDISCOUNT
COMMERCIAL PAPER
James c. Hallock, in Letter to The
Herald, Outlines Views on
Currency.

To the Editor: The Democratic emerg-
ency currency act is now occupying the
attention of all public men After the
panic Of 1907 a Republican Congress
passed the Vreeland-Aldrich emergency
currency act, approved May ~, 1905, which
will expire by Limitation June 30. 1914
A measure has been printed by the
Senate Banking and Currency Committee,
based on two bills. one introduced by
Senator owen Is. 2Ss9, on August Z, and
the other by Senator Shafroth Is. So4D,
on August 3, which provide for the re-
tirement Of the per cent bonds at par.
In my statement TO the committee CHear-
lngs, D. I7o), I suggested also authoriz-
ing the Secretary OF the Treasury, in an
emergency, to rediscount commercial
paper and securities.
The design was TO draft an unobjection-
able bill, providing for new form OF
Treasury gold notes, not a single one OF
which could be issued. even in an emer-
gency, without 50 per cent OF gold as a
reserve against II in the Treasury. And
every note issued under the act would be
redeemable in gold. The bill is appended.
JAMES c. HALLOCK-
Washington, Nov. 10. 1873
The bill provides for an increase Of the
2 per centum bonds, to retire national
bank notes and gold certificates by issu-
ing Treasury notes redeemable by issu-
and to rediseount commercial paper and
other securities in an emergency. The
text of the bill follows:
BE II enacted by the Senate and House
of Representatives OF the United States
OF America in Congress assembled, that
the Secretary of the Treasury is hereby
ceived into the Treasury or Subtreasury
of the United States, to have them can
celed and the gold represented by such
certificates transferred to the gold re-
serve of the Treasury, and in lieu of such
Cancelled gold certificates or Of gold coin
or bullion so transferred to issue Treasury
gold notes redeemable in gold at the
Treasury of the United States, at Wash
ington. in the District of Columbia, which
notes shall be receivable for all taxes,
customs. and other public dues.
THE Secretary Of the Treasury is fur
ther authorized. in his discretion, when
requested to do so by any national bank
having outstanding circulating notes, Sc
cured by 2 per centum bonds. to purchase
such bonds at par and accrued interest.
and to assume the redemption at par OF
the bank notes secured by such bonds,
charging amount OF such notes and eX-
:
centum bonds and paying the balance in
cash to such national bank. When such
national bank notes the redemption of
which has been thus assumed shall come
into the Treasury of the United States,
they shall be Cancelled and retired, and in
lieu OF such notes SO Cancelled and re-
tired the Secretary of the Treasury shall
issue Treasury notes OF the same amount,
provided the free gold coin or bullion In
i H..
cent of their face value.
Sec. 2 That the provisions Of section
ffty-one hundred and sixty-seven Of the
Revised Statutes of the United States,
authorizing the Comptroller Of the Cur
rency to require additional deposits of
bonds or of lawful money in case the
market value Of the bonds held TO secure
the circulating notes shall fall below the
par value OF the circulating notes out
standing for which such bonds may be
deposited as security, are hereby re-
pealed.
Sec. g. That gold reserve Of 50 per
centum Of all Treasury notes issued and
put in circulation under the provisions of
this act shall be maintained in the gold
reserve fund Of the Treasury for the pur-
pose OF redeeming the same, and the Sec
retary of the Treasury is authorized for
that purpose to purchase gold and exer-
else all OF the powers granted to him by
section Of the act Of Congress entitled
An act to define and fix the standard
Of values, to maintain the parity OF all
forms of money issued or coined by the
United States, to refund the public debt,
and for other purposes approved March
Il. 1900. and he is further authorized by
general orders to require all national
banks to keep in their vaults as their law
full money reserve such kinds of United
States money as he may deem to the best
interest of the government.
Sec. l. That in an emergency. IL he
be satisfied with the character and value
OF the securities proposed. the Secretary
OF the Treasury may. at his discretion,
rediscount for any national currency as
sociation or clearing house assSeiation
of banks commercial paper and other
securities, to an amount not exceeding |
10 per cent of their cash value, and for
this purpose issue the required amount
in Treasury notes such as are authorized |
by this act upon a gold reserve Of 90
per cent. but not otherwise: Provided, |
That these loans made by the govern |
ment in an emar1ency shall be for short |