The Providence news. (Providence [R.I.]) 1891-1906, 1903-09-03

Auditorium hotel by the National as
ISOLATION of Merchants and Travellers.
Lyman ]. Gage addressed the association
on the same subject just before his re-
tirement from the treasury department,
and great interest was attached to the
speech ton ght OF the present secretary.
In his discussion OF the financial ques-
tion Secretary Shaw declared that what
was needed was not an elastic dollar,
| but some provision by which, auto
uatically. the aggregate volume OF dol
lars should increase whenever and
wherever more dollars were needed and
would as promptly retire when not need
ed. His speech in part follows:
To those who are comparing 1903 with
1893, and who think history likely TO re-
peat itself every 10 years, permit the
suggestion of a few radical differences
In conditions.
F Ten years ago a large number OF stu
dents OF commercial and industrial con-
ditions believed our then financial syS-
tenn not only unsafe, but absolutely
Vicious. At least four kinds OF money
United States notes, treasury notes. sill
We dollars and silver certifcates-were
believed TO be dangerously near deprecia-
ton.
| Grave doubts existed and were freely
expressed whether the secretary OF the
Treasury could MAINTAIN the parity OF
these forms OF money II he chose. and
equally grave doubts existed as to the
wisdom OF attempting 10 maintain their
parity. Aye, a very respectable number
OF very good people and very respect
able portion OF very good public press
Openly advocated the redemption or
greenbacks I'm silver ami the refusal 10
Exchange gold for any form OF money
except gold certificates.
GOLD READILY EXCHANGED.
No such doubt or desire now exists.
BY express statute IL has become the
duty OF the secretary OF the treasury TO
maintain the parity with gold OF all
forms OF money coined or issued by the
|government. and express authority is
given to negotiate loans. II necessary, for
that purpose. In other words. the secre-
tary Of the treasury Is directed 10 ex-
change gold for any and every kind and
form of money coined or issued by the
Cnited States and 10 bond the govern
ment TO the last limit OF his authority
whenever such action is necessary to
the maintenance OF parity. man Is
fool who sends his money into hiding
now.
II is true that a very respectable num-
Der OF very good people. and of that
number / desire 20 be classed. believe
Dur financial system, good as II is might
be improved by adding an element OF
Elasticity. do not think there exists
any great number who believe we should
have any imitation.
Eight years ago we had s21 per capita.
Now we have certainly more than $29 and
probably nearly $50 per capita. Conser-
vative business men and conservative
bankers do not generally consider this an
insufncient normal minimum volume OF
currency What is needed is not an
~lAa lo oil Lar Ilaf Tfafn hxs
which. automatically. the aggregate vol
ume OF dollars shall increase whenever
and wherever more dollars are needed
and will as promptly retire when not
needed.
There is now no statutory prohibition
against the well-nigh inherent right OF
banks TO issue circulating notes. This
right exists throughout the United
States. but subject to a tax OF 10 per
cent per annum. This tax is prohibit
tory.
III were given authority 10 formulate
measure that would provide the requi-
site elasticity 10 our present currency
system. l think I should add an amend
ment permitting national banks with the
consent of the Comptroller OF the Cur
rency TO issue a volume OF circulating
notes equal to 30 per cent OF their bond
secured circulation, at tax Of ) per
cent, the same TO be retired at will or
. by direction OF the comptroller. by the
deposit OF an equal amout OF lawful
money with any sub-treasury.
EMERGENCY CURRENCY ONLY.
Three things / know. First. this addi
tional circulation would spring into ex-
.istence almost instantly whenever and
wherever interest rates advanced TO the
point Of profit. Second. II would as
became normal. Third. II would be alb
solutely safe--as good as the present ma
IJonal bank issue, and with a slight ana
fmmaterial change. identical in form and
.appearance-for the government amply
protected by the 3 per cent tax, would
Iunderwrite II.
But you say this is emergency cur
.rcncy. Anything more is imitation. IL
gency currency, so-named. and over le-
eahzed clearing house certificates. in that
|try no new or doubtful form of money
|snd the presence Of these notes will not
advertise the stringent condition which is
|the occasion OF their existence.
| The only persons who would know OF
BIS existence would he the comptroller,
|the bank and the few people who would
take sufficient interest I'm the published
statement OF the bank 20 compare the
OF government bonds on deposit In the
Treasury.
Prominent among the benefits. II not
| The principal benefit. would be the sub
|ftantial guaranty against sudden increase
|in interest rates. and an equally impor-
|ant guaranty against dangerously low
rates OF interest. Each locality would
he able measurably TO provide for it's own
emergencies.
| But YOU say this would be no aid 20
|cpmmerce undcr ordinary conditions 1
REPLY that under ordinary conditions the
|nresent volume II sufficient. and the
tountry might well rejoice whenever the
was able TO report no dollar
|of this additional circulation In ex-
Istence
II I do not intimate that this is the only
|vsy 10 secure elasticity. I only say u is
|nne way. and IA is an effective way. and II
|poesesses no element Of imitation. but
would afford a very respectable cushion
sudden financial conclusions. and
[ev reople ask more There is nothing
|orisinal or novel In the scheme. n is
kirpiy the German plan slightly modiAed
fo conform 10 our present system
NO POLITICS INVOLVED.
This is not political gathering. and