The Saint Paul globe., 1903-09-04
A DEMOCRATIC PRINCIPLE AD-
- MITTED.

One sentence in the talk of Secre-
tary of the Treasury Shaw to the busi
ness men of Chicago should be read
thoughtfully by our people and with
a sense of no little satisfaction by all
Democrats. This is that wherein he
refers to the privilege of issuing cir
culating notes as a "well-nigh in
herent right of banks" He does not
mean what he says altogether. for
he proceeds to explain that he would
not confer this right again on all
banks, but only on those subject to
the national banking act; but he ad-
mits the justice of principle for
which the Democratic party long con-
tended.
The right to issue circulating notes
was taken away by the use of the pow
er of taxation. In order to give a
monopoly to the national banks. uAder
the delusion that this was necessary
to make a market for the bonds that
we had to issue during the Civil war,
tax Of 10 per cent was placed on all
state bank issues This, of course, is
prohibitive; and year after year, in
congress and in the national platforms,
a demand for the repeal of this act
was made by the Democratic party
Now, in searching for some means Of
providing an elastic currency, a Re-
publican secretary of the treasury is
forced to give qualified assent to the
practical demand, and complete assent
to the principle involved.
The suggestion that Secretary Shaw
advances is that national banks be
permitted to ISSUE with the assent of
| the controller of the currency, addi-
tional or emergency circulation to the
amount of so per cent of their bond
| secured notes, subject to a tax of
per cent This circulation would be
retired at pleasure or by direction of
the controller, on the deposit of lawful
money with any subtreasury. Such linn
tied adhesion does he give to those who
protest against the rigidity of cur
rency volume as compared with the
ever fuctuating demands of trade.
This plan is presented too much in
outline to be the subject of thorough
criticism at present. At a glance
vital defect can be seen. It would
make the controller of the currencq,
| and through him the secretary Of the
nd thrO oh, Ii
in power a dictator of money volume
and of the fortunes of chosen institu-
tions. Suppose sudden contraction
| called for increase of circulation, and
all the banks were applicants for the
! privilege. Without the approval of the
controller it could not be obtained, and
he could withhold it in any given
case. Similarly as to retirement.
vent and doing business to which
| the continuance of the notes that it
had been allowed to issue was indis-
| pensable, it could be ordered to it's
own ruin by being compelled to retire
! and redeem these notes at the mere
| pleasure of a government official.
| We do not say that this would often
| happen, but we point out that it might
| happen; and that no such authority
should be conferred on any man. For
it is not the arbitrary use of it that
we have so much to fear as the COM
plete control which the knowledge of
its possession would establish, and the
practical coercion that could and
would thus be enforced, without the
need of proceeding to extreme meas
ures. For banks have to know on
| which side their bread is buttered, and
are extremely sensitive to regulations
that place them in the power of any
outside influence.
! The need Of an elastic currency. one
that will either expand or contract,
according> to business conditions.
stands confessed. 1t is a need whose
1 proper satisfaction the Democratic
| party should be prepared to furnish by
a plan of its own. Secretary Shaw
has given but a bare hint of the
scheme that approves itself to him.
and out of this two things show prom
inence. One is that the natural idea