alone of Treasury notes. The principal of all sums so advanced when repaid shall be returned to the 'emergency circulation fund,' and all interest upon such sums shall be passed to the credit of the Treasury under miscellaneous receipts." Here again was presented the vital principles of (a) quick money, Government notes (b) against adequate security, (c) loaned by the Government at interest high enough to prevent inflation. Senator Aldrich, then in charge of the Bill, declined to accept this amendment or to improve upon it (1900). The panic of 1907 ensued, leaving American business men and banks unprotected, and Senator Jones wrote to me, as follows, calling my attention to the amendment which he had proposed and suggesting that it would have prevented the panic of 1907, if it had been adopted: 66 '(LAW OFFICES OF JAMES K. JONES AND JAMES K. JONES, JR., 621, 622 COLORADO BUILDING. TELEPHONE MAIN 638) "WASHINGTON, D. C., February 11, 1908. "HON. ROBERT L. OWEN, UNITED STATES SENATE, CITY. "DEAR SENATOR: "I inclose a copy of the amendment which I offered to the financial bill on February 6, 1900.-Congressional Record, p. 1534. "You will, of course, recall the fact that you prepared the original draft of this proposed amendment, which I introduced in almost, if not in exactly, the form submitted by you. I think you will find the debate on that bill at that time quite interesting. "If that amendment had been adopted at that time and it had been written in the law, it would, in my opinion, have prevented the late panic. "I am glad to see that at last the principle of emergency currency properly secured is recognized and that the Committee on Finance of the Senate indorse it. "Congratulating you on your early con nection with this idea, I am Very sincerely yours, "JAMES K. JONES." -Cong. Record, Feb. 25, 1908, p. 2429. THE PANIC OF 1907 After the panic of 1907 occurred Senator Aldrich brought in a proposed remedy, afterward known as the "Aldrich - Vreeland Law," and in his address to the Senate February 10, 1908 (Cong. Rec., p. 1755), he pointed out that the panic "Was the most acute and disastrous in its immediate consequences of any which has occurred in the history of the country." "That 'the shrinkage in values of securities and property, and the losses from injury to business resulting from and incident to the crisis, amounted to thousands of millions of dollars'; "That 'a complete disruption of the exchanges between cities and communities throughout the country took place'; "That it is impossible to estimate the losses which were inflicted by this suspension of payments by the banks, and the resultant interruptions of exchanges,' etc., etc.; "That 'there was financial embarrassment on every hand, and an impossibility of securing the proper funds to move crops or to carry on the ordinary business of the country'; "That 'the suspension or disarrangement of business operations threw thousands of men out of employment and reduced the wages of the employed'; "That if the business interests of the country are left defenseless through the inaction of Congress, the most serious conse quences may follow."" Senator Aldrich, as Chairman of the Committee on Finance, thereupon urged the passage of Senate Bill 3023, to amend the National Banking laws. This bill provided for the establishment of National Currency Associations, and it was approved May 30, 1908 (35th Stats., 546). These National Currency Associations, to be composed of not less than ten national banks in number, and each association having a capital and surplus of at least five millions of dollars, were to be authorized as corporate bodies. They were authorized to expand the circulation by the approval of the Comptroller of the Currency to an amount not exceeding seventy-five per cent of the cash value of the securities or commercial paper deposited under the direction and control of the Secretary of the Treasury. The notes were to be bank notes, and many restrictions were |