The Denison review. [volume] (Denison, Iowa) 1867-current, 1899-02-17
GOV. SHAW'S ADDRESS
Before the Manufacturers Associa-
ton OF New York State.
AN APPEAL TOR ACTION.
What Must be Done to Give This Country a
Stable and Reliable, Yet Flexible
Currency,
CONTINUED from last issue.)


lis convention, the recommendations of
Secretary Gage, the bill reported 10y the
committee on banking and currency.
and the one more recently prepared by
the committee on coinage, wegbts.and
measures, are all in substantial har-
mony, and none of them do violence to
the suggestions of tile president in his
message of 1897 and emphasized by him
IN 1888. 1T should he remembered, how
ever, that the recommendations of the
president and those of Secretary Gage
are couched III general terms while
bill embodying these recommendations
must necessarily deal with details and
b. correspondingly more comprehen-
sive.
Thus far have said nothing of an
elastic currency. While it may not be
wise to urge this phase of the case up
on the attention of congress at this
time IL will not he deemed out of place.
hope, if submit a few observations
on the subject. We hear it suggested
now and then that the government can
provide the elementof elasticity as we'll
as the banks. This proposition is more
easily announced than demonstrated, L
shall be glad if some one Can explain
a method by which the government can
provide additional currency in given
locality when needed, and retire it
when otherwise idle. The csrrency
famine in 1898 afforded an excellent OPP
portunlty for the government to fur
nish relief had it been within it's pow
er and had congress been so disposed.
An extra session was called, and some
wise legislation passed, but no addi-
tlonal currency was provided. The
government legal tenders vera then
recognized as very dangerous ele-
ment, and no one who believes at all in
redeemable paper ever so much as
suggested an extra issue to meet extra
ordinary needs. Government loans
were negotiated, aggregating $685., o0O,-
600, but this was not for the purpose of
distribution in those localities where
most needed. and, now that we have
sufficient currency to meet the de-
mands of business, this loan has not
been paid, and there is no way by
which it can be discharged, except by
increased revenues and corresponding
increased taxation.
Let me Illustrate, if I can, the de-
mand for the practical operations of an
elastic currency. Repeatedly, and for
several years in succe ssiOn. the prom
1 issory notes of some of the best known
manufacturers of flour and meat pro-
| ducts of this country we're offered at
rediscount to the country bankers of
central Iowa and presume elsewhere.
Why! Because these people were bor-
rowing more money with which to han
die the cattle and grain of the west
than the banks of their respective cit
les could supply. Why did not the gov
eminent come to the rescue and drop
a few extra millions in Chicago and
Minneapolis? No one has yet suggest
ed safe way by which this could have
been done. Some may suggest that
these banks could have rediscounted in
the east. where money may have been
plenty. Doubtless this was done to
some extent, bnt it is an unsafe meth
ed except to meet an emergency.
When first went to Iowa. money
was scarce and rates we're correspond
ingly high. There was plenty of money
IN the east but it did not naturally flow
westward. 1t had to be forced. Why
did not the government remedy this?
1t was pOwerless so to do. The banks
attempted equalization. Those of the
west would send bunch of farmers
paper to Chicago or New York as col.
lateral and borrow at 6 or and some
times 10 per cent and loan to the farm
ers at somewhat higher rate. But
there is limit beyond which this
course is not safe, and the bank which
resorts to rediscounts to the extent of
its credit will very soon be discredited.
The people of my state very naturally
considered themselves imposed upon by
these high rates. Frequently, and for
some years, they ran as high as2 per
cent per month: l have since known
interest rates as high as five per
cent per month in western Nebraska
and the Dakotas. Nevertheless, l have
never known them as high as was cur
rent in eastern cities in the fall and
winter of 1890. remember very we'll,
while money was plenty with us, it was
on several different days quoted at the
rate of 1856 per cent on call on the
streets of this city-one. half of one per
cent day and the legal iDterest-so
said the press dispatches. These ex.
tremes existed because of non-elastic
currency. The government did some
thing to relieve the situation; it paid
its interest before maturity; it took up
and Cancelled bonds not yet due. paying
premium therefor. for it should be re-
memherpd that Mt that time the revaI