The Birmingham age-herald., 1914-10-03
NO MORE FINANCIAL
 LEGISLATION NOW
Federal Reserve Board Must Handle Situation Develop
 ing From the War

Washington October 2.--tSpecial )--That
 no further financial legislation is to be expected to help in carrying the cotton crop was indicated today by Representa- tive Phelan of the banking and currency communities. right-hand man and conh-
 dent of Chairman Carter Glass. No bet
 ter posted man can be found, in the ab- sence of Glass, and his prediction may be accepted as final.
 "I am opposed-the committee is op- posed-to the Henry bill for the treasury to deposit $500 coo, 900 in national and state banking institutions in the south to bs advanced to the cotton planters or land owners" said Phelan to the correspon- dent of The Age-Herald. Two, or maybe three, members of the committee may in- | dorse it. but that will be alb
 And how about the bill to permit state | banks to issue currency under the Aldrich- vreeland act, without the 10 per cert tax?" he was asked.
 l "A report against that bill has been prepared" he answered, "and I see no | sign of any of the majority of the com l mittee weakening. In fact it is highly | improbable that any further financial leg
 islation will be enacted by this Congress, especially along these lines.'
 l And with this sweeping decree goes Representative Blaclsmon's bill to pro- | fdbit and punish the diversion of crop
 carrying or crop-moving funds to other
 uses. The Secretary of the Treasury can, | if he wishes, punish banks which adopt
 that practice, says Phelan, and neither | he nor other highly conservative mem- | Der of the committee deem it necessary to | make such diversion of funds an offense 1 under the law.
 | On the other hand, the committee takes great credit to itself for having approved | a measure raising the amount of com-
 nercial paper as collateral for currency from 30 per cent to 100 per cent of a banks capital and surplus. This will!
 not alter the limitation of the gross
 amount of circulation which bank may issue, but simply will provide that a larger proportion of such circulation may be based on commercial paper.
 Tt so happens, says the committee in | its report, that many banks, especially l in the south and west, have not enough l investment in bonds and other securities | to enable them to put out the amount of l circulation which they now require and ! to which they should be emitted within |: sne limitation provided py the act Of Au- | gust f. 1914. These banks, however havu | all adequate supply of commercial paper and inasmuch as this security now is rec | ognized as the most liquid of assets, there 1 seems to be no reason for denying the is , | suance of emergency currency tO national banks which are able to offer it us se- | curity
 Just at this time considerable amount | of additional currency is demanded ana the demand seems justified. crop-moving | season is at hand, and at this tune or | year the amount of currency in circula- | ton is greater than at other seasons" | But, the cotton men of the south argue, | of what use Is 1t to permit the issue of 1 tremendous amounts of currency if the cotton man is not allowed to get his hands l on 1t? What the cotton men are seeking | Is not necessarily hundreds of millions more of money, but some method by | which they can borrow their fair share Of what money now Is afloat, or may be is- l S, ed at a reasonable rate of interest and on such stable collateral as cotton | or warehouse receipts.
 The financiers of the House, however, l seem deaf to this plea, and only through | the treasury or the federal reserve board | will the cotton men find possible relief and assistance.