Newspaper Page Text
the JEFFERSONIAN
Vol. 111. No. 11.
fOMEK BILL FOUGHT SY DEMOCRATS
Washington, D. C., March 8. —(Special.)
The democratic members of the house bank
ing and currency committee will file on Mon
day a minority report, when the Fowler bill
is submitted to the house by the republicans.
The widely divergent and stubbornly con
tested views of the various members of the
committee which for the past two or three
months has been struggling with the intri
cacies of the currency reform problem, have
finally been reconciled, so far as surface indi
cations show anything. The majority have
agreed to accept the new Fowler bill, while
the democrats have united on a plan for
treasury notes.
When agreement succeeded discord on the
democratic side, the democratic leader, Mr.
Williams, submitted a bill embodying demo
cratic views. It provides for the issue to all
banks and financial institutions, whether
under the control of the government or not,
of United States emergency treasury notes.
These notes will be issued upon the deposit
with the treasury of United States, state,
county and municipal bonds. The railroad
bond provision of the Aldrich bill is not
approved by the democrats.
Report Submitted by Mr. Lewis.
Representative Lewis, of Georgia, the rank
ing democrat on the banking and currency
committee, will today submit the report which
follows:
“'We oppose the Fowler bill because it is
radical and revolutionary, and if enacted into
law would completely change the entire exist
ing banking system of the country which has
been in operation for nearly a half century
and would result in retiring from circulation
forms of money that have proven satisfactory
for the same length of time.
“.We oppose the bill because it virtually
takes from the government all power to
regulate and safeguard the national banks of
the country and wholly gives over the control
of such institutions to a board of managers
selected by the hanks themselves.
“The Fowler bill requires the national
banks at once to retire all outstanding bank
notes secured by United States government
bonds and later on to retire United States
notes, commonly called ‘greenbacks,’ sub
stituting- therefor credit notes, or rather notes
issued by the banks themselves, to an amount
equal to the capital of such banks, with the
power, the board of managers approving, to
increase such issue to an amount equal to
double the capital of such banks.
“The bill not only provides that national
banks shall have the power to issue all money,
other than gold, but makes these institutions
the agents of the government through which
it must cany on all its business, making its
A Weekly Paper Edited by THOS. E. WATSON and J. D. WATSC’
Atlanta, Ga., Thursday, March 12, 1968,
deposits therein and discharging its obliga
tions through these institutions.
“Now for all the power and special
privileges conferred on national banks by
this bill, such as issuing money, acting as
agents for the government in receiving de
posits and conducting the financial opera
tions thereof, these favored institutions are
only asked, in return to -pay a tax of 2 per
cent per annum on the notes issued and 2 per
cent interest on deposits of government
m >ney. To avail themselves of the privilege
of issuing money and receiving deposits of
government money, these institutions are not
required to put up as collateral security any
of their capital. It is true a small per cent
of their reserves is required to be kept with
the secretary of the treasury, instead of being
retained in the vaults of the banking institu
tions, as now required by law; but to
secure the great privileges bestowed by the
bill, the banks do not have to hypothecate a
cent of their capital.
“Will Drive Out State Banks.
“We oppose this bill for the further rea
son that under the very many liberal and spe
cial privileges given the national banks, the in
evitable result will be to drive out of business
all state, trust and savings banks and force
them to become national banks.
“With the banks all organized urfder one
system, enjoying sole and complete power’ to
issue all moneys as they deem proper, will
there not be great danger either from contrac
tion or inflation of the amount of money in
circulation? Will it not be within the abso
lute power of these banks, or their board of
managers, to make money scarce or to make
it plentiful; to make the rate of interest high
or to make it cheap; to cause a depression or
to produce a relaxation?
“Surely congress is being asked to delegate
to the banks a most dangerous and wonderful
power in giving them absolute control of the
medium of all values, money, and in confer
ring on them sole power to issue money in
such quantities as they think wise. The mi
nority members of the committee say emphat
ically that this country is not ready to dele
gate such dangerous power. Without doubt
the most serious proposition with which con
gress has had to deal in many years, is the
regulation and control of the great corpora
tions that have grown overpowerful and be
yond the control of the government.
“Yet, while we are planning ways whereby
we may wisely and justly subject these great
interests to government regulation, we are
asked by the Fowler bill to create a banking
system all powerful, with complete and undis
puted authority to issue the circulating me
dium of the country in quantity, in manner
and at times to please those fortunate enough
to enjoy this great special privilege.
“Approve the Williams Bill.
“The minority members of the committee
do not believe that conditions justify such
extreme legislation as the Fowler bill pro
poses, and present attached to this report H.
R. 16730, known as the ‘Williams bill,’ which
we believe to be eminently safe, sound, and
practical and which, added to our present sys
tem, will give healthy elasticity to our cur
rency.
“Briefly, our bill provides that the govern
ment shall issue the money and shall furnish
‘United States emergency treasury notes,’
which may be loaned to any national bank
ing association, state bank, savings bank, or
trust company, upon such institution deposit
ing with the government of the United States,
state, county and municipal bonds, said bonds
being designated by the bill as ‘interconvert
ible’ bonds as collateral. The minority mem
bers of the committee believe only United
States, state, county or municipal bonds
should be used to secure the loan of these
‘United States emergency notes,’ and as there
are at least $2,000,000,000 of such bonds to
be had for this purpose, no fears could be
entertained that ample security of this class
would not exist for any emergency.
“Would Be Emergency Issue Solely.
“One of the weak and disturbing features
of our currency system lies in failing to pro
vide sufficient circulation to meet the increased
demand for currency during the crop moving
periods. It is estimated that additional cur
rency to the amount of about $300,000 is
required to move the cotton and grain crops
in the fall of each year. Having that in
thereof, and one pei’ centum per month
turn these emergency currency notes at the
rate of one-eighth of one per centum for the
first four months, or any fractional part there
of, and one-half of one per centum for the
second four months or any fractional part
part thereof, and one per centum per month
thereafter, thus forcing the banks to return
these emergency currency notes to the treas
ury, thereby restricting the use of these notes
solely as an emergency currency.
“We desire to emphasize the fact that all
kinds of banks are permitted to borrow these
emergency currency notes, thereby broadening
the scope of the measure and extending its
benefits to every section of the country.
“Reserves.
“The bill requires that every bank shall
keep its entire reserve in its vaults, one
half to be in gold, but permission is given
to keep the other half in interconvertible
bonds, that is, such bonds as it may use under
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five Cents.