The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1902-12-22
SHAW AND THE BANKERS
-
He Tells Them That Currency Should
Follow the Flag.
HIS IDEAS on THE PRESENT system
Some Day "The Prices Current Of All
Asia viii Be Written in United
States Money"
HIS IDEAS on THE PRESENT SYSTEM

Chicago, December 20.-Two hundred Of
Chlcagos most prominent business men
were az the banquet Of the Chicago Rank
ers' club at Kingsley tonight Tie chief
speaker was Secretary OF the Treasurer
SHAW, who addressed the club on Possible
Financial Legislation His remarks were
well received By his bearers,
Secretary Shaw said. ia part:
"a want 70 emphasize the necessity for
an element or elasticity in our curleAcy Sys-
TEN. IL has been said thar our present
system is not elastic This is trGe. IN the
seuse IN which the term is employed, but
Ia another sense is a mistake. Unfortunate
ly, however, rue volume contracts Just
when ~ should expand, and expands wlcn
1t should contract
inns is not gsptioue criticism. 1t is the
naked truth.
There is iust as much need for contrac-
tion when money IS not legitimately needed
rs there Is for expansion when more money
is required. And unless contrlctou can he
induced, expansion is Impossible.
What are the essentials ~ an elastic
currency First its prompt retirement
prompt rcissuduce whom needed Aud, un-
less You have the one, you can not have
the other. The one Us al essential proteC-
tion against inhation. The other is TIE
best safeguard against Striugepcy. Cur
rency sualcicut To- DO the business ~ The
country Is not Undated, \ redundant cur.
rency, he that much or little, Is always
Some have suggested the Issuance OF
currency based upon deposits OF state aud
municipal bonds. Instead Of government
bonds. but this would leave the system as
inelasdc as az present What Is needed
is the right Co issue limited amount OF
currency without eucroachiuz upon the
available funds or the assets already IN Tho
banks, but with such safeguards as wal
Insure It's abundant safety aud It's prompt
retirement when the demand ceases,
This can not be accomplished under
the present system Or National bank crcu-
iatlon Bonds are too scarce aud the price
too high, and there is no way either "a
Induce additional circulation when the de
mand increases, or It's retirement when IN
tertSt rates are low. The gradual hquidI
ton Of the government debt Is reducing
the amount Of bonds available for CirCula
tion. II therefore follows: Either the idea
of having an elastic currency must bt
abandoned, and, In order TO maiutaln which
we have, the government debt must loo
perpetuated and more bonds issued ne
needed; or, somc new scheme must be
evolved. II the banks are to Issue any cir
culation whatever, II must be secured
either by specific asests, like government
buuds deposited with the treasury. or hy
with an cver-ncreasing fund derived from
tax upon circulation suniciclt to covcl
all possible loss.
1T is gratifying 10 know that botl
houses Of congress are giving the question
very careful consideration and that tia,
prospect Of some relief in the uear, II not
immediate, future is promising. When tb,
recommendations In the presidents mes
I sage shall be fulfilled and all our forms OF
! money are exchungeablc at par for tn,
| established standard, 25.S grains Of golJ
| for every dollar, our financial centers vii
| he able to compete successfully with thost
| of foreign countries as International clear
| ing houses Aud II, in addition, Unite,
| States currency shall follow the Gag, tn
| time IS not far distant when the price
! current of all Asia will be written in Unit
| ed states money. Let United States none,
I hc rs secure as the British pound and III
/ employment 10 the com ncrcct ~ the Wcri'
/ viii become as general as tho English Ian
guaEp.'