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ficulty. The atmosphere quite closely embled that which precedes a financial sturbance; the banks were closely accu

lating their resources; the discount rate r "call money" in Wall Street advanced aterially. Naturally these symptoms impending disaster seriously disturbed e friends of the Wilson administration. . hey doubtless had much to do in persuang the President to push the reform of the urrency at the special session; so far as ne basis of financial uncertainty was rtificial that is, the lack of currency nough to provide for the legitimate need .f business the President determined hat this uncertainty should be removed.

These circumstances also called for immediate attention from Mr. McAdoo. Was there any act of his that could ease up the situation? Did his office contain any resources that could legitimately be used to fight off the spectre of impending panic? Thanks to certain almost forgotten legislation of the Republican era, Mr. McAdoo found the machinery ready to his hand. Immediately following the panic of 1907 Congress had passed an emergency currency measure known as the Aldrich-Vreeland bill. This was intended merely as a stopgap, a law that should remain on the statute books only until Congress should adopt definitive currency legislation in fact, the Aldrich-Vreeland law expires, by limitation, next year. It authorizes the Secretary of the Treasury, when conditions appear to justify such an act, to issue $500,000,000 temporary currency based upon national and municipal bonds and commercial paper of the highest character. Mr. McAdoo now issued a reassuring public statement. There was no occasion for worry or excitement, he said. Under existing conditions there could be no financial stringency in the fall. The Treasury Department would take all necessary precautions there should be all the money required for legitimate business and agricultural needs. And then he called the attention of Wall Street and the farmers to something they had apparently forgotten the half a billion dollars in currency lying unused in the Treasury vaults. He stood ready at any time, said Mr. McAdoo, to issue as much of this

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A PLEASANT PERSONALITY

WHICH HAS WON FRIENDS DESPITE THE FACT THAT MR. MCADOO HAS NOT TRIED TO BE POPULAR AND HAS NOT "OPENED" HIS DEPARTMENT TO THE REPRESENTATIVES OF THE PRESS

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emergency currency as the situation called for. His announcement had an immediate and mollifying effect upon the money market. The discount rate for call money in New York dropped from three to one and one-fifth per cent. Such indications as there may have been of approaching trouble at once disappeared.

In August, Mr. McAdoo took action that was even more direct. This time he did not merely hold forth the policy of treasury relief - he actually furnished it. This is significant of the governmental attitude, not only in the actual use of Federal cash for the relief of business, but in the attending circumstances. There is nothing particularly new in the deposit of treasury money in a time of financial stringency. The money, however, with the exception of Secretary Shaw's deposit of $26,000,000, has almost invariably been placed in the vaults of the large banking interests in New York. The most recent case of the kind took place in the panic of 1907. Several banking institutions had closed their doors; long lines of anxious depositors were besieging the paying-tellers of others; the financial giants of the community were holding midnight sessions in the hope of forestalling a total ruin. At this crisis Secretary Cortelyou deposited $25,000,000 in New York, which was distributed as call loans, and prevented a wholly disastrous collapse on the stock exchange. The significant points are that that Administration did not act until the panic situation had actually arrived and then dealt out its assistance through the medium of Wall Street.

In the early part of August this year, when the skies were fairly clear, and the likelihood of a disaster in the fall only a possibility, Mr. McAdoo placed $50,000,000 on deposit for use in the crop moving season. He did not place this money in Wall Street; indeed, he specifically excluded the Eastern banks from participating in the deposits; all of it, he announced, would go to the banks of the South and West- the place from which the cotton, wheat, and corn were actually to be moved. In order to obtain expert advice, Mr. McAdoo summoned a council of representative bankers a council from which the

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AT THE BALTIMORE CONVENTION MR. MCADOO, SENATOR SAULSBURY, AND MR. DAVIES OF WISCONSIN

the Treasury Department as in other branches of the Government, the masses of the people are to receive the chief consideration. ation. What Mr. McAdoo has done tunes in harmoniously with the general Wilson programme. The same idea dominates the new currency legislation. Here, again, the ruling principle is that the Government itself, and not certain private banking interests, is to control the issue of money. It is once more the Wilson idea of democracy - the separation of the "privileged classes" from the use of governmental agencies for their private profit. In the

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themselves be this authority. This attitude shows how hopelessly irreconcilable are the viewpoints of the Wilson Administration and the interests which are usually known as "Wall Street." In many details Mr. Wilson and Mr. McAdoo may yield; upon this fundamental principle, however, they stand absolutely firm. The criticism is that the Federal Board will be composed merely of "politicians," who will use their power for personal and party ends. What the Administration is trying to do, however, is to erect a new Federal body, like the Supreme Court or the Interstate Commerce Commission; if "politics" is kept out of these tribunals, as it surely is, they believe that there is little chance. that the Federal Banking Board will degenerate.

For better or for worse, the United States is in for four years of a new governmental experiment: the exclusion, from the use of governmental power, of all representatives of particular interests, business or political. The currency bill is merely another manifestation of this new ruling providence. It, is perhaps, as good an opportunity as one could have to test the basic soundness of the Wilson idea.

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MR. MCADOO's COUNTRY HOME AT IRVINGTON-ON-THE-HUDSON

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