The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1902-01-09
sHAW,s GOLD BASIS.
Financial View of the incoming Sec
rotary Of the Treasury.


Des Moines, Ia-Iowa is exhibiting
the pride OF appreciation in the mas
ter Of the counuy's finances, Governor
leslie NJ Shaw. In the selection Of
Governor Shaw 70 this position, whose
Importance is at its greatest now, il
is conceded by the neighbors and
friends Of the outgoing governor that
IL was fitness for The place that com
mended him above all things. II proof
were needed. they point TO the unusual
fact that Iowa already had d member
of the cabinet.
As TO his policy when he becomes
secretary of the treasury, Governor
Shaw viii be an able defender of the
single gold standard. He viii be salts
fed with the present national banking
system and viii look with favor on as
set currency.
The governor handed the American
representative a copy OF his speech de-
ilvered before the Bankers association
at Norfolk. Neb.. last April, which he
SAID accurately represented his views.
and which he authorized TO be pub
hshed as the views which he at pres
ent holds. In his speech he says:
We have at last reached one vital
conclusion-the nation can have but
one standard coin. II took a long
time to learn that we could not have
two standards. Men OF excellent abil-
ity were slow to recognize that stand
ard coin is always worth the metal Of
which it is made-that the stamp of
the government does nothing to the
25-S grains Of gold contained in our
standard dollar.
Every piece of money, and every
thing that circulates as money must be
redeemable, directly or remotely, in
standard coin. Present provisions may
be sufficient to protect the present vol
ume of silver under ordinary circum-
stances, hut so long as there is an ele-
ment of doubt the danger still exists,
and this danger viii exist in proportion
as the doubt is recognized.
We have a 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 1850 feet long
This silver commerce will not absorb.
In lieu thereof the government issues
a warehouse receipt, commonly called
a silver certificate; stamps upon a
piece of paper the statement that there
has been deposited with the United
States treasury twenty silver dollars,
to be paid to the bearer on the surren-
der of the warehouse receipt But
there is no provision for the exchange
ability of either the silver or the GER
tificate at par with gold.
Under present conditions there is no
danger in this. The balance of trade
is in our favor. We sell abroad $780,
600. 600 per annum more than we buy,
and this requires the importation Of
$500. 000. 900 of gold per annum for the
redemption of $500, 0O0, 900 of outstand-
ing national. municipal or personal OBJ
legations, or the investment of that
much money in foreign securities; the
account has to be balanced.
But these conditions will not last
forever. We have One-fifth Of the
worlds supply of gold. Suppose this
to be settled in gold. In ten years We
would have the worlds supply. It is
needless to say it would not remain
with us. Other nations would borrow,
if not buy. and it would need to be eX-
ported.
''The point I make is this: As soon
as We begin to export gold in excess
of its importation, then it will begin
to cast about for a place of safety,
knowing that this great volume Of sill
yer is not eXchangeable or Tedeemable
in gold This timid fellow may deem
il wise to hoard little gold against
possible danger, and the next timid
fellow discovering, as he looks over
the reports. that some gold has been
boarded, viii be induced to hoard also.
and in this way we stand on the road
to a panic
Some time, in some way. either with
or without an enforced lesson, provision
VIII be made for the exchanged iiity
of all forms Of money.
I do not say that silver certificates
should be redeemable in gold. nor do
1 say that national bank notes should
be redeemable in gold. I am speaking
theoretically. and not advocating any
specific measure. I am willing that the
national bank notes shah be redeem
able in silver certificates. and the sill
yer certificates be redeemable in sill
yer, and that this redemption may take
place in Washington. if you please,
and then the silver may be made re-
deemable in $4,000 sums in gold.
"All I contend for is that every draft
on a solvent merchant, every note
signed by a solvent debtor. every piece
of paper that circulates as money and
every coin shall ultimately be payable
redeemable or exchangeable for the
standard coin of this country. In no
other way can it be protected from dis
count Safeguard it as you may. under
conditions easily conceivable. the sill
yer certificate or the silver or the coin
may be at a discount. and so long as
there is the element of danger, how
ever remote. so long there will exist an
ever present cause Of panic.
O g q
81 consider our national bank sys-
tenn one of the best in the world. Il
was a wise conception.
Suppose it were abolished. The gov
eminent would still owe the debt. If
the bonds were held abroad it would
only pay the interest. ana this interest
would help to settle the balance Of
trade and would reduce the importa-
ton of gold in proportion to its vol
ume. rate of interest would be
charged higher than now
I'VE have all noticed that as the
facility for using government bonds as
the basis for national bank circulation
has increased the value of these bonds
has increased until the government OBJ
legations now circulate at a lower rate