Below is the OCR text representation for this newspapers page.

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 (Continued on Page Four.) five Cents.