Omaha daily bee., 1902-10-06
CLEWS COMPLIMENTS SHAW
Prompt Aotisn Of Secretary Avsrts All
Danger Of a Panic.
RESULT OF DEFECTIVE CURRENCY SYSTEM
strictly . Financial Squat and Has
Its Inception In Speculation aud
Heavy DESIGNATING OF
Prosperity.

Prosperity.
NEW YORK, oct. 5-(special)-Henry
Clews, in his weekly wall street letter
says;
Wall street passed through a sharp crisis
this week without disaster. Bold and un-
expected action by Secretary Shaw in re-
lieving the banks from keeping a reserve
In government deposits ana IN accepting
than United states Bonds unauestionsbiy
saved the stock market from panic. While
some objection has been raised as to the
legality OF the seCretary's action, none has
been heard as to the expediency of these
two entirely new rulings. We are burdened
with a poorly devised treasury and cur
rency system, which always works badly
In emergencies, and the secretary deserves
praise rather than criticism for ~endeavor-
ing his utmost to counteract its III effects.
The true remedy for such emergencies, as
repeatedly urged in these advices, is In
telligent reform OF our currency and fiscal
Shaw met in regulating the money market
ought never to be imposed upon any gov
Of the greatest acumen and integrity the
business interests of the country and pres
ent methods are exposed to the uncertain
ties OF a single mind, no matter how wisely
that mind may act, and rightly or wrongly
there Is always the fear that such a mind
may lack correct judgment or be unduly
Influenced. This element of uncertainty is
Infinitely greater than would be possible
under a system where the extremes In the
AAlOlAtA ANaA net nNlt ItkuldNtu ~
means which trained observers could meas
ure, instead Of artificial means the effci-
ssncy ana tims Zines OF Which can never
the best he could to correct the bad work.
ing of a defective system in an emergency;
It is now the duty of congress to modernize
that system and save the country from a
repetition OF such experiences as those OF
last week.
Money supply Inadequate.
These defects, however, simply aggra-
waited the crisis in a serious manner they
did not cause the crisis. That had it's be-
ginnings in the tremendous growth OF bust
ness, In the great advance in values, In
the locking up of large sums In big COM
bination schemes and new enterprises. and
In Stock exchange speculation on the high
level. Meanwhile, the supply of money has
not grown in proportion to demands, and
the country was doing too large a business
upon it's existing capital. Either the latter
must expand or the demand must be forci-
bly, contracted There was no
available source of prompt enlargement OF
our capital to meet the legitimate and Inn
parative demands of crops and fall trade.
Our bankers had borrowed In Europe as
far as possible; several hundred millions
of French, English and German funds are
ency. as fully expected by experienced men,
became keen and at this point treasury
absorptions intensified the difficulties and
almost precipitated a panic. which would
have had serious consequences but for the
secretary's timely action. 1t was perfectly
plain, however, that liquidation must come
somewhere; that somewhere Of course fall
ing upon weak speculative spots. Funds
on call employed In carrying lightly mar
legitimate purposes, the banks wisely de-
Gliding to stand by their regular customers
and mercantile borrowers. The business
by the recent break In Wall street. These
II should be understood are In perfectly
sound and satisfactory condition. Recent
violent disturbances indicate no derange-
ment of general trade and no over extern
sion of credit except in Wall street.
Result of Speculation.
1t was strictly a financial squall; the
result of excessive stock speculation, and
rangement, although some heavy losses
were Incurred by some of the holder and
less experienced operators. Nevertheless,
will prove a much needed warning to the
over confident. Prosperity is carrying a
heavy load; II has been largely discounted
by the farseeing men at the head of the
numerous enterprises and schemes now In
course of development. We may have a
better market later on, but for the present
values are exceedingly unsettled. Perhaps
the most acute stage in the money market
has been passed, but high rates and more
or less stringency must be expected for
several weeks to come. No safe bull mar
ket need be anticipated until the return
Of currency from the interior can be safely
calculated upon. The coal strike is. of
course, an unfavorable element In the situ-
been remarkably slight. Very soon the
elections will be a feature. This may be
regarded as an on year, but a new set OF
Issues are coming up for discussion, chiefly
those of an economic and social character.
and the industrials are likely to be especi-
ally sensitive to such movements.
shaw saves a Panic.
The situation has been saved from panic
by the nation having an able and self
reliant secretary of the treasury, who has
the courage of his convictions and has
dared to act in time OF emergency. q quality
which has been lacking with a majority of
secretaries of the treasury since the time
of Salmon p. Chase. the great and emf
nently successful war secretary. Thu pres
ent secretary has shown in his efforts to
remove the stringency of the money mar
ket, occasioned by the great prosperity of
the country, confidence in his own financial
ability, and finding one method after the
other unsuccessful was quick TO select
others until the work of saving the country
from a panic has now been accomplished,
all due to his sagacity, alertfulness, cour-
age and good business judgment. The banks
are now relieved from keeping a reserve on
government deposits, and they are also
enabled to furnish collateral against their
deposits other than United States bonds.
This ought to be ample to very soon afford
relief and adjust the money situation TO
meet the demands for crop moving and
other legitimate business uses.