The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1902-12-04
Mr.. Shaw's Recommendations.

The report of the secretary of the treas
ury shows that on June 80 the available
gold balance, including the gold reserve
of 15O,000Goo was 1852, 1s7,361, a record
unsurpassed in the history Of the treasury.
The available working balance on Nov. 1
was $50, 000, 900, as compared with s95, 00o,-
900 in September, condition which re-
moves the treasury from being factor
in the money market. The secretary notes
the increased demand for paper currency
of the smaller denominations, the latter
inclusive of gold coin, constituting 80 per
cent Of the whole stock of money.
The secretary points out some urgent
needs Of our banking system, one Of which
Is the inadequacy Of our outstanding
government bonds to secure additional cir
cuation. AS matter Of fact the cream
Of the purchasable bonds is more and
more taken from the market, and In case
of a pressure for currency the power Of
the banks to increase the amount ont
standing by the issue of notes will suffer
impairment by the large bond purchases
and the reduction of tho bonded debt. The
problem presented Is how to keep up q
supply of money adequate to the needs Of
the country's business, which is daily in
creasing in volume.
During the pressure for currency this
autumn, Secretary Shaw resorted to vari-
GUS devices to increase circulation. lie
increased the deposits of. internal reve-
nue. receipts in the national banks, al
lowed them to put up state and municipal
bonds as security for such deposits, in
stead of government bonds; gave his as
sent to the banks to borrow government
bonds and issue circulation against them
would seem to require the bonds to be
owned by the issuing bank.
The secretary, after his experience dur
ing the past six months, has given up his
former theory that there is sufficient elias
ITCHY in our currency system, and he
comes out, without reserve, in his report,
In favor of the issuance Of circulation
based upon general credits If properly
safeguarded. He would not have such
currency a first lien on assets and would
impose small tax on circulation to cover
possible loss. ., -..<-. . 80.
The propositions for emergency circu.
lation appear in various forms and are an.
tagonized by some on the ground that, as
proposed, such circulation would not have
the backing Of government bonds. The
continual retirement of the bonded deb
with limited prospect Of new issue il
large volume, makes it necessary to con
slider the question suggested by Secretary
Shaw. The great expansion of the bust
ness of the country requires a we'll regu
lated expansion of the currency to meet it
AS the outstanding government bonds ar
inadequate to secure such additional cir
oulation, resort must be had to the basinl
of currency issue, before very long, upol
other securities.
The secretary's recommendation that al
the government obligations shall be re
deemable in gold is unassailable. r.
The discovery in regard to Governo
Lind's campaign expense calls attention t
the exceeding deafness Of perhaps tn
deadest law on our statute books, namel
the corrupt practices act. There neve
has been a prosecution under that ac
and about the only purpose it has eve
served is to lead to lot of perjury an
deceit A sensible thing for the next leg
islature to do would be to wipe it off tn
books; it is of absolutely no value what
ever $50
OF course nobody expects Governor Va
SAINT to take a hand in the organizatio
of the house, and he has manifested n
desire to do so. But when Mr.. Eabcoc
appeals to him for certificate OF ftnes
for the office Of speaker, it viii be pei