Evening star., 1902-01-01
GOV. SHAW. ON FINANCE
SUCCESSOR TO SECRETARY GAGE
GIVES HIS VIEWS.
Thinks Additional Legislation Neces-
Eestions on Banking System.

Governor Shaw Of Iowa, who is to sue
ceed Secretary Gage in the Treasury De-
partment in q recent interview gave his
views on the financial question. He said, in
parti
years ago the penny was made redeem
able and because of the statutory pro-
visions for it's redemption piece of copper
Of less value than the tenth of a mill cir
culates at par, and as the equivalent Of
the hundredth part Of 258 grains Of gold
If it were not redeema,ble 1t would be worth
the same as old copper as soon as its coin
age exceeded the absorbing capacity Of
commerce.
"If it were originally wise to safeguard
the penny by making it redeenable, upon
what theory is the silver dollar safe with
out analogous legislation for its protec-
ton? Present provisions may be sufficient
to protect the present volume Of silver un-
der ordinary circumstances, but SO long as
there Is an element Of doubt there is an
element of danger, and this danger will
exist in proportion as the doubt Is recog-
ntzed.
'.There ts in existence no excess of pen
MES. and they are coined only as actually
needed, and very penny coined is immedt-
ately absorbed; and yet, ! say, to insure
their circulation at par 1t was deemed nee
essary to provide for their redemption. The
same cannot be said OF silver.
supply OF S11VeT COIu.
eve have volume Of coined silver now
in the vaults of the United States sufficient
to fill a corn crib eight feet wide, ten feet
high and 125O feet long. This volume COM
merce refuses to absorb. In lieu thereof
the government issues warehouse receipt
commonly called a silver certificate-stamps
upon a piece Of paper the statement that
there have been deposited with the United
States treasurer twenty silver dollars, to be
paid to the bearer on the surrender of the
receipt. But there Is no provision for the
exchangeability of either the silver or the
certificate at par With gold.
''IJnder present conditions there is no
danger In this The balance Of trade is in
our favor. We sell abroad $500, coz, 600 per
REQUIRES the Importation Of $500, ,000, 600 of
gold per annun1, or the purchase or re-
demption Of $500, 0,O00. 600 Of outstanding ma
tional, municipal Of personal obligations: or
eign securities The account has to be bal
anced. 54 GL A. il.&
Peril In iHearding Gold.
but these conditions may not last for
ever. We hold one-fifth Of the worlds sup
ply of gold. Il Suppose this balance Of $500
600. 900 per aaanum should be settled in gold?
In ten yeats wei would have the worlds
supply, It is needless to say it would not
remain with us. Other nations would bor-
row or buy, and it would need to be ex-
''The point I make is this: AS soon as we
begin to export gold in any large amounts
the timid vial begin to cast about for a
place of safety. 3 Knowing that this great
volume Of silver ts not exchangeable or re-
deemable ia gold, this tinid fellow may
deem it wise to hoard little gold against
q. possible danger, and the next timid fell
low, discovering as he looks over the re-
ports that some gold has been boarded, will
be induced to hoard also.
'Such conditions might start us well on
the road to a panic Some time, In some
way, either with or without an enforced les
son, provision will be made for the ex-
changeability Of all our forms Of money.
Necessary Safeguards.
ssPlease do not understand me as saying
that silver certificates should be redeemable
in gold; nor do say that the national bank
notes should be redeemable in gold. I am
speaking theoretically, and not advocating
any specific measure. It might be safe to
make national bank notes legal tender and
redeemable in silver certificates, and the
silver certificates redeemable in silver. IL
silver were redeemable In gold
ssAH contend for Is that every note
signed by Q solvent debtor, every draft on
q solvent merchant, every deposit with a
solvent hank, every piece OF paper that chr
oalateS aH money and every coin SHAH us