Evening star. [volume] (Washington, D.C.) 1854-1972, 1903-07-18
FINANCIAL SCHEMES
Two Sets Of Currency Re-
formers in Congress.
LEGISLATION LIKELY
IF PRESIDENT AND SECRETARY
SHAW HAVE AGREED ON BILL.
Matter to Be Taken Up at Extra Ses-
sion and May Go Through
Both Houses.
LEGISLATION LIKELY

Since semi official utterance from Oyster
Bay made it practically certain that finan-
cial legislation is to be undertaken at the
extra session of Congress coincidently with
conclusive action on the Cuban treaty there
has been renewed speculation as to the
character of the proposed legislation.
The impression was given from Oyster
Bay that the President would recommend
one of the general schemes of financial leg
lslation which have been proposed in Con-
gress, and the advocates of each plan have
been claiming the President would back
their especial pets. The President was
described as contemplating ringing mes
sage to Congress at the meeting of the
extra session, in which he would clearly
outline the cure for existing evils in the
currency situation. Thus far, however, no
body has been able to definitely declare the
nature of the scheme the President has in
mind, but great deal of guessing is be-
ing indulged in.
Two Glasses of Currency Reformers.
In general way there are two classes
of currency reformers in Congress:
FIRST, the financiers who follow Senator
Aldrich in his suggestion for permanent
increase of the bank currency the substi-
tuition of bonds other than government
'' 'SS"iitS loi utpoSll OF pubic
moneys, thereby releasing government
bonds and allowing their use for additional
national bank circulation
Second. the advocates of IAN elastic cur
rency which would permit the increase of
nauonal bank currency in times of need
ana retire 1t when it was no longer needed
Inc term elastic currency" while very
comprehensive, was acceptable to the av-
eraee member of Congress who appreciated
that IT covered situation often compIained
OF by the bankers and business men of his
section; He felt that at the proper time
some financial experts of the bankin. and
currency committee might be able to write
a law for IAN elastic currency" and thar
1t would be all right
Lately the elastic currency people have
peen claiming that President Roosevelt
was with them They point to his finan-
clal speech delivered at Quincy Ill ApriI
=, after Secretary Shaw had been with
nm on the train for several DAYS The
President said:
The Presidents Utterances.
Our currency laws recently have been
improved by specific declara tions intended
10 secure permanency of values But this
ooes not imply that these laws NAV not
De stlii further improved and strengthened.
IL Is well nigh universally admitted
that our currency system is wanting In
elasticity; that is, the volume does not re-
spond to the varying needs of the country
do ..Y
different localities
Our people scarcely need to be, remind
eo that grain-raisng communities require
a larger volume of currency at harvest
time than during the summer months. The
same principle applies to every industry
to every community.
our currency laws need such moditica-
,ioh as VIII insure the parity of every dol
lar coined or issued by the government
and such expansion and contraction of our
currency as will promptly and auton,atic,I
ly respond to the varying demands of
commerce VI
permanent increases would be daneer-
Gus, permanent contraction rrinous. hr,
the needed elasticity must ha br,,tt
about by provisions which will pern,it ho,b
contraction and extraction as the VARYING
needs or the several communities and husi
ness interests may require"
Secretary shaw's Outline
In circles where the subject has been dis
cussed in the last few DAYS It was rumor.d
that Secretary Shaw has outlined the pe,-
eral principles of the scheme of elastic
currency, ard that these are now being
taken under consideration by the financial
experts. who will be called upon to draf,
bill. They were said to be as follows:
1t Is proposed to authorize the issuance
of additional currency" by national banks
up to % per cent of the amount of their
capital On this the government would place
tax of, say. 5 per cent per annum Because
of this tax banks would only call for the
additional currency in time of greatest
stringency-that is. interest on loans would
have to be higher than per cent to induce
bank to go to the expense of issuing ad-
ditional currency The instant interest
rates dropped below 8 per cent this cur
rency would retire automatically
The two classes of finance reformers in
Congress represent two ideas. The west
ern men simply want to provide more
money when great crops are to be moved
and when settlements are to be made by
western merchants with eastern manufac-
turers and dealers. The eastern men 1t is
claimed. are more concerned in establish
ing the value of other classes of securities
than government bonds. and furnishing the
basis for permanent increase of money
which can be used in the great promotion
schemes of Wall street.
Sharp Division Of Opinion.
There is likely to be sharp division of
opinion in Congress over the subject of
financial relief There is no other subject
than the measures of financial relief which
they espouse.
There will be much debate and discus
sion, without doubt and the possibility of
eventual failure to agree, with collapse of
all plans.
1t is said, however. that II the President
and his Secretary of the Treasury have
agreed upon a financial bill, and if the
President finds it compatible with all the
circumstances of the case to recommend
the bill definitely in a message to Con-
gress, there is possibility of compromise
which will give at least partial measure
of relief to the many interests clamoring
therefor.
b.