Evening star. [volume] (Washington, D.C.) 1854-1972, 1903-09-03
NATION IS THRIVING
Secretary Shaw So Declares
in an Address.
DISCUSSES SITUATION
AN ELASTIC DOLLAR is NOT
WHAT Is WANTED.
But More Dollars When the Stringency
Comes, He Tells Business
Men at Chicago.
DISCUSSES SITUATION

Before two hundred business men from
ali parts of the country Secretary OF the
Treasury Shaw last evening gave talk on
the business outlook at a banquet given at
tho Auditorium Hotel. Chicago. by the Ma
tional Association Of Merchants and Trav-
elers.
In his discussion of the financial question
Secretary Shaw declared that what was
needed was not an elastic dollar but some
provisions by which, automatically, the ag-
gregate volume of dollars should increase
whenever and wherever more dollars were
needed. and would as promptly retire when
not needed His speech was as follows:
Secretary shaw's Speech.
A representative Of a large metropolitan
daily recently submitted the following Ques-
ton as the basis Of an interview: Has
the boom left the United States richer than
II found it7' The honor was declined, as
usual, but i could not help contemp plating
few facts.
Compare the following with available sta
tistics covering any former period and
there can be but one answer to the prop
osition. Our farms produce four thousand
millions. Have these lands become sterile
or their occupants indolent? Our five hun
dred thousand factories add hfty-six hum
dred millions In value to three thousand
millions of raw material, and their net
output exclusive of Implications. is more
hives of industry been consumed by the
elements? 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
thousand millions. Are these storehouses
of wealth exhausted or their capacity d.
minished7 Our two hundred thousand miles
of railway transport six hundred million
tons of original freight, not including dupli-
cations and pay eight hundred thousand
operatives, exclusive Of officers, six hun
dred and fifty million dollars. Are these
thoroughfares of commerce in the hands Of
receivers are they likely to be?
AS nearly as can be estimated, the annual
productive capacity of the American peO-
pie is eleven billion dollars. This does not
include Implications. This does not include
raw cotton and manufactured cotton, but
raw cotton and the value added thereto In
the process of manufacture. OF this we
export one and one-half billions, and I'M
port billion of other merchandise. mainly
retrospective with our own products.
We therefore consume the equivalent of 95
per cent of all produce. Not while
these conditions continue will prosperity
cease.
Most Prosperous People In the World.
We are the most prosperous people in the
world because we both produce and con-
sumo more than others The little that
we sell abroad. about 10 per cent of our
abroad. 9 or 7 per cent Of our net con-
sumption, constitute NO challenge to the
statement that our prosperity rests with
ourselves. Unless our factories and work.
shops voluntarily close. or labor voluntarily
refuses employment or commerce volun-
tar1ly ceases its activity there Is no oc-
oasion for alarm. Unless apprehension be-
comes epidemic and ultra conservatism con-
tagious, the immediate future holds for US
as much OF real good as the immediate past
has showered upon U.s.
To those who are comparing 1903 with
1893 and who think history likely to re-
peat itself every ten years, permit the sug-
Sestion of a few radical differences in con-
ddtions. Ten years ago. whether wisely or
unwisely whether with or without founda-
tion 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 dollars and silver GER
tihcates-were believed to be dangerously
near depreciation. Grave doubts ex-
whether the secretary Of the Treas
ury could maintain the parity of
these forms Of money II he chose, and
equally grave doubts existed as to the wis
dom Of attempting to maintain their parity
Aye very respectable number OF very
good people. and a very respectable portion
OF very good public press. openly advo-
Gated the redemption of greenbacks in sill
yer and the refusal 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 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 10 negouate
loans II necessary, for that purpose. In
other words the Secretary of the Treasury
Is directed to exchange gold for any and
every kind and form OF money coined or
issued by the United Ssates, and to bond
the government to the last limit or his
authority whenever such action ls neces-
eary to the maintenance of parity A man
is fool who sends his money INTO hioihs
now.
1t is true that a very respectable number
of very good people, and of that number l
desire to be classed, believe our financial
system, good as 1t u.s. might be improved by
adding an element of elasticity. l do not
think there exists any great number VINO
believe we should have any imitation Eight
years ago We had FL per capita Now we
have certainly more than so, and probably
nearly $50 per capita. Conservative bust
ness men and conservative bankers do not
generally consider this an insufficient nor
NAL minimum volume of currency. l re-
peat. the only criticism now offered relates
to the want of elasticity. Not that a dollar
be made elastic but that the volume
shall be made responsive to the demands
of business. OF course, the term is mis-
homer. Elastic material like rubber will
expand In one direction but 1t contracts in
the opposite direction, while the material,
the volume. is neither increased nor dimn-
fshed. What is needed is not an elastic
dollar. but some provision by which auto
matically the aggregate volume of dollars
shall increase whenever and wherever more
dollars are needed. and will promptly re-
tire when not needed.
Bank Circulation
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 tax of 10 per cent per annum.
The tax Is prohibitory. If were given au-
3 thorfty TO formulate measure that would
provide the requisite elasticity to our pres
ent currency system, think should add
an amendment permitting national banks
with the consent Of the controller Of the
currency. to issue a volume of circulating
notes equal to 90 per cent of their bond SCI
cured circulation at a tax Of per cent
the same to be retired at will or by direc-
ton OF the controller, by the deposit of an
equal amount of lawful money with any
subtreasury ~ AA'
Three things / know First tbis add,
tional circulation would spring into ex-