The Savannah morning news. (Savannah, Ga.) 1900-current, 1902-12-21
SECRETARY OF TREASURY
TALKED ON CURRENCY.
principal Speaker at Banquet of
Chicago Bankers.

Cnfcu&O bankers.
Chicago, Dec. 20.-Two hundred of
Chicago's prominent business men were
at a banquet of the Chicago Bankers
Club tonight. The chief speaker of
the evening was Secretary of the Treas
ury Shaw, who addressed the club on
possible Financial Legislation" His
remarks were warmly received. In ad-
dition to Secretary Shaw, a number
of local financiers delivered short ad-
dresses upon financial topics.
Secretary Shaw spoke, in part, as
follows:
Il have been gratified recently. not
only with words of Endorsement of
the elastic currency movement. but
equally gratified with words of criti-
cism; for they have nearly always
come from those who recognize the
need of something additional to the
present system. And generally critics
have in mind practically the very
thing for which others are contending,
though they employ other and va
rious terms of designation.
Permit a few illustrations. Not long
ago, one of the ablest legislators in
the United States. one whose name
every man in this audience would pro-
nounce if 1 should but mention his
state, said to me. I am opposed to
all asset or credit currency What I
want is currency based upon a gold
reserve Then he unfolded practically
the same scheme that every credit
currency man has in mind. but he
wanted the banks to maintain a gold
reserve asainst it. To this. no one OBJ
jects, and for this most all contend.
Another equally well-known sena-
tor came to my Office the other day
and wanted to know if it was not pos
sble to take a single step in the right
direction that should be plain and cas-
lily understood, and that would afford
temporary relief until the people
should have time to study the ques-
ton. Then he went on to outline what
he had evolved from his own construc-
tive brain, and 1 congratulated him,
for he had the essentials for which
every friend of elastic currency is con-
tending. Both of these gentlemen
would have to compromise somewhat
on details, but they were both we'll
grounded in the essentials.
"A third man. equally prominent,
looked me in the face and said, L will
never consent to any asset or credit
currency. My memory runs back to
the SOS. and 1 know what unprotect-
ed bank circulation means He was
rampant in his opposition, so 1 aban-
doned the names at which he SHE'D,
and outlined the general principles of
a currency issued and protected by the
guaranty of the government, and the
government protected by tax ten
times sufficient to cover the risk. He
expressed the opinion that something
of that kind would be feasible. He
seemed surprised when l explained that
that was about all anyone was con-.
tending for.
Il have tailed with men who favor
an emergency currency, as they call
it-one that surely will be retired when
not needed-and when they outline
what they have evolved, they have the
same thing under another name. Il
am disposed to think the thing itself
would meet with well-nigh universal
approval If the Objectionable names
could be eliminated
And now, what are the essentials
Of an elastic currency? First, it's
prompt retirement when not needed;
second, its equally prompt reissuance
when needed. And unless you have
the one you can not have the other.
The one is an essential protection
against imitation. The other is the
best safeguard against stringency.
Currency sufficient to do the business
of the country is not imitation. A re-
dundant currency, be that much or
little, is always dangerous. Unem-
poyed freight cars are not an aid but
an obstruction to commerce. In prac-
tice, they are retired from circulation
when not in active use. Unemployed
money is not only an obstruction to
commerce, but an inducement to spec
ulation. What we want is a side track
for unemployed money.
How shall retirement be secured? 1
recognize that some careful students
of the subject think that this will reg
ulate itself when given free play, and
that the lower the rate of tax the more
certainly it will retire. This would,
perhaps, be true If our entire system
were unified upon that plan. am not
so certain if the present system, which
must not be disturbed. is to be sup
plemented by the allowance of a linn
tied issue available only in times of
stringency. If the issue were a billion,
per cent. retirement would mean a
fifty million contraction. But If the
issue be limited to from fifty to one
hundred million, per cent. retirement
would not signify much. A reasonably
high rate will certainly afford a strong
inducement for the banks to reti~. |
their circulation when not actually |
needed. What that rate shall be is a |
question for very careful, not scien- |
tific, but nractical Investigation