Aberdeen herald. [volume] (Aberdeen, Chehalis County, W.T.) 1886-1917, 1902-09-08

SECRETARY SHAW
CALLS ATTENTION to- THREAT.
ENED FINANCIAL VOLCANO.
II Such Talk Was Made by Democrat He
Would be Called Calamity howIer.
From the Republican Secretary Of the
Treasury II Sounds Ominous.

from the Republican Secretary OF the
Treasury II Sounds Ominous.
Attention has been called to Mr.. Well
mans report Of an interview with cabi.
net officer, now known to be Secretary
Shaw. 1t is putting it mildly to say tina:
the interview has created profound i'm
preston, but the impression is not ex-
actly the kind that was intended. The
evident purpose of the interview was to
brighten tariff reform republicans by the
threat of a panic, but the facts given
have startled the country. Secretary
Shaw shows that even with an unex-
pected increase OF five hundred million
dollars in the circulation the farmers
deposits have to be loaned over and over
again to furnish a basis for the boasted
prosperity. According to Mr.. Wellman,
Secretary Shaw says:
LET me give you some facts without
Comment. You 60 out to the farmers
and ask them how they are getting on.
Tney will tell y u that they were never
before 80 prosp ,rous. They are out Of
debt and have plenty Of money. Ask
them where their money is and they will
tell you it is in the local banks. Call at
the country banks and inquire into their
condition, and their officers will tell you
they are all right. Money plentiful and
reserves above 40 per cent. where is
your money! oh, it is in the banks of
Omaha, Minneapolis, Kansas City, etc.
'Next you 60 to the bankers in Omaha,
Kansas City and Minneapolis, and they
will tell you the same thing. They are
in good shape; reserves 35 per cent.
Where is your money! In Chicago
Now 90 to Chicago. Same story. Banks
all right. Reserves 80 per cent. But
the money is in New York.
Finally, pursuing your inquiries in
New York, you will find that both de.
posits and loans have been enormous.
The money is not in the banks. There
are only six national banks in New York
that have not been below their legal re-
serves since January l. You want to
know where this money is? Well, $780,.
000,0 900 is loaned by national banks on
the bonds Of industrial corporations.
These corporations issued bonds instead
Of stocks because the national banks can
take the former and can't take the latter.
Intrinsically they are no better than
stocks. In most Of them there has been
a lot Of water-curing. Here you see
where $3.50, 100000 Of the country's sur.
plus stands against lot of undigested,
promotion-produced securities. The trust
companies have put out millions more in
the same way.
"That is where we stand. 1t is all
right as long as it is all right. But l
don't want to see anything happen. l
don't want to see these indus.rials begin
to topple over, to fall against one another
and come down in a heap like children's
play.blocks. And this is one reason why
l am opposed to tariff revision agitation
that might start things going the wrong
way"
"What will the depositors think Of the
prospect? What will be the natural
effect Of the suggestion that any attempt
to compel honest business methods will
precipitate panic and cause failure Of
the banks? If the dspositors. begin to
draw their money out OF the local banks
and the country banks begin to reduce
their city reserves to a minimum, Score.
tary Shaw will be more to blame than
any one else. If any democrat had re-
fected half as seriously upon the financial
standing OF the banks he would have
been denounced as an alarmist and &C.
cused OF having grudge against the
banks, but Secretary Shaw is at the head
of the treasury department and is both in
close touch and in full sympathy with
the financiers. When he declares that
we are doing business on top Of finan.
cial volcanc-a regular Mount Pelee-his
statement must be taken as reluctant
admission of condition that he would
have gladly concealed.
This is republican prosperity! And to
what will republicans attribute the pre-
carious condition? Does protective
tariff put the country in position where
gross injustice aid high-handed extortion
must be meeky submitted to as the
alternative OF panic? If so, who can
defend protective tariff?
Does the trust system render the people
helpless and make them impotent to pro-
test against watered stock and fictitious
capitalization? If so, who can defend
the trust system?
Does the gold standard supply such an
insufficient quantity of money that the
reserves must be loaned and rcloaned
until our banking institutions resemble
the blocks in a child's playhouse? If so,
who will say that we must accept the
gold standard as final settlement of the
financial question? II this is the condi-
ton Of our banks, who will advocate an
asset currency or say that bank note is
botkov Lo n n vroov,boolyc