The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1903-09-03
The TAX.
Secretary Shaw's Plan for an
Elastic Currency.
Would Make Rate 6 Per Cent
Instead of 10.

listened to Secretary of Treasury Shaw
talk on THE Business Outlook at a
banquet given last night at the Audi
forum hotel by the National Associa-
ton of Merchants and Travellers.
Lyman A. Gage addressed the associ-
alton on the same subject just before
his retirement from the treasury depart
ment and great interest was attached to
the speech of Secretary Shaw. In his
discussion of the financial question Sec
rotary Shaw declared that what was
needed was not an elastic dollar but
some provisions by which, automatical-
ly the aggregate volume of dollars
should increase whenever and wherever
more dollars were needed. and would as
promptly retire when not needed.
His speech in full follows:
"A representative of a large metro
politan daily recently submitted the fol-
| lowing question as the basis of an in
terview: Has the boom left the United
States richer than it found it?' The
honor was declined, as usual, but L
could not help contemplating a few
facts.
Compare the following with available
statistics covering any former period
and there can be but one answer to the
proposition. Our farms produce four
thousand millions. Have these lands be-
come sterile or their occupants indolent?
Our five hundred thousand factories add
56 hundred millions in value to 5000 mil
( lions of raw material, and their net out
put, exclusive of Implications, is more
than 5000 millions. Have these hives
of industry been consumed by the ele-
mentS? Six million operatives in these
factories and workshops annually sign
pay rolls aggregating three billions.
Have these artisans become paralyzed
or have their wages been reduced? Our
mines, quarries, clay banks, and oil wells
yield a thousand millions. Are these
storehouSes of wealth exhausted or their
capacity diminished? Our 100000 miles
of railway transport 900 million tons of
original freight, not including dupllca-
tions, and pay 100000 operatives, exclu-
siVe of officers, $50 million dollars. Are
these thoroughfares of commerce in the
hands of receivers, or are they likely to
be?
LAS nearly as can be estimated the an
nuaI productive capacity of the Amer1-
can people is IL billion dollars. This
does not include Implications. This does
not include raw cotton and manufactur-
ed cotton; but raw cotton and the value
added thereto in the process of manu-
facture. OF this we expect one and one
half billions, and import a billion OF
other merchandise, mainly noncompeti-
tive with our own products We ther9-
| fore consume the equivalent OF 80 per
cent of all we produce. Not While these
conditions continue will prosperity cease.
|
| in the world because we both produce
and consume more than others The
little that we sell abroad, about 10 per
cent. of our net production, and the
little we purchase abroad, or per
cent. of our net consumption, constl-
| tute no challenge to the statement that
our prosperity rests with ourselves
Unless our factories and workshops
voluntarily close, or labor voluntarily
refuses employment, or commerce vol
unfairly ceases its activity, there is no
occasion for alarm. Unless apprehen-
sion becomes epidemic and ultraconser-
vatism contagious, the immediate fu-
ture holds for us as much of real good
as the immediate past has showereo
upon us.
ITO those who are comparing 1908
with 1898, and who think history likely
to repeat itself every ten years, permit
| the suggestion of a few radical differ
ences in conditions. Ten years ago,
whether wisely or unwisely, whether
with or without foundation in fact or
reason, very large number, and Of
that number many close students of
| commercial and industrial conditions,
believed our then financial system not
only unsafe but absolutely vicious. At
least four kinds of money-United
States notes, treasury notes, silver dol
Lays and silver certificate s-were be-
lieved to be dangerously near deprecta-
| ton. Grave doubts existed, and were
freely expressed, whether the secretary
of the treasury could maintain the parity
of these forms of money if he chose,
and equally grave doubts existed as to
| the wisdom of attempting to maintain
their parity. Aye, a very respectable
number of very good people, and very
| respectable portion of very good pub
lie press. openly advocated the redemp-
ton of greenbackS in silver and the re-
fusal to exchange gold for any form of
money except gold certificates. No such
doubt or desire now exists. BY express
statute it has become the duty of the
k..a,
the parity with gold of all forms of
money coined or issued by the govern
ment and express authority is given
to negotiate loans, if necessary, for
that purpose In other words, the sec
rotary of the treasury is directed to eX-
change gold for any and every kind and
form of money coined or issued by the
United States, and to bond the govern
ment to the last limit of his authority
whenever such action is necessary to
| the maintenance of parity. A man is
a fool who sends his money into hiding
now
1T is true that a very respecta BILE
number of very good people, and of
that number l desire to be classed, be-
lieve that our financial system, good as
| it is, might be improved by adding an
element of elasticity. I do not think
! there exists any great number who be-
lieve that we should have an imitation.
Eight years ago we had twenty-one dol
lars per capita. Now we have certain
lily more IMAM lW6nIy-nlne anu prODaDly
| nearly thirty dollars per capita. Con-
sentative business men and conservative
bankers do not generally consider this
an insufficient normal minimum volume
of currency. l repeat. the only critl-
cism now offered relates to the want of
elasticity. Not that a dollar can be
made elastic. but that the volume shall
be made responsive to the demands of
business. OF course the term is a mis-
homer Elastic material like rubber will
expand in one direction, but it contracts
in the opposite direction, while the ma
terial, the volume, is neither increased
or diminished. What is needed is not
| an elastic dollar, but some provision by
which. automatically, the aggregate
volume of dollars shall increase. when
ever and wherever more dollars are
when not needed.
There is now no statutory prohibition