The St. Louis Republic. [volume] (St. Louis, Mo.) 1888-1919, 1903-07-19
Committee Which Is to Draft New
Bill Studies Different Plans
of Advocates.
SHAW SUBMITS A SCHEME.
Proposes to Allow Banks Add
tional Issue of % Per Cent of
Capital Subject to Tax of
j Per Cent.

Washington. July E-Since senior
fetal utterance from Oyster Bay made 1t
practically certain that financial legisla-
ton is to be undertaken at the extra ses-
sion Of Congress coincidentiy with con-
elusive 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
islation 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 n ringing mes
sage to Congress at the meeting Of the eN-
ira session in which he would clearly out
line the cure for existing evils in the cur
rency situation.
Thus far however. nobody has been
able to definitely declare the nature OF the
scheme the President has In mind. but
great deal of guessing is being INDUCED in.
In a general way there are two classes or
currency reformers In Congress: First. the
inanciers who follow Senator Aldrich in his
suggestion for a permanent increase OF the
bank currency. the substitution Of bonds
Otner IMAM JULIUS ScNNiAs'
for deposit of public moneys, thereby re-
leasing Government bonds and allowing
their use for additional national bank cir
culatior.
PRESIDENTS ATTITUDE.
Second. the advocates of ian elastic cur
rency" which would permit the increase OF
national bank currency in times Of need
and retire 1t when 1t was no longer needed.
The term elastic currency" while very
comprehensive. was acceptable to the aver
age member Of Congress who appreciated
that It covered a situation often complained
OF by the bankers and business men OF MS
section. He felt that at the proper time
some financial experts Of the banking and
currency committee might be able to write
a law for IAN elastic currency" and that II
would be all right.
Lately the elastic currency people have
been claiming that President Roosevelt was
with them. They point to his financial
speech delivered at Quincy, Ill. April 70.
after Secretary Shaw had been with him
on the train for several days. The Presi-
dent said:
Our currency laws recently have been
Improved by specific declarations lntehdeu
to secure permanency of values. But THIS
does not imply that these laws may not be
still further improved and strengthened
1T is well-n:gh universally admitted that
our currency system is wanting in eiasticlty'
that is. the volume does not respond to the
varying needs of the country as whole, nor
to the varying needs Of different localities
Our people scarcely need to be reminied
that grain-raiSing communities require
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 modification
as will insure tho parity of every dollar
coined or issued by the Government and
such expansion and contraction OF our cur
rency as will promptly and automatically
respond to the varying demands OF cotn-
merce.
permanent increases would be dangerous
permanent contraction ruinous: but the
needed elasticity must be brought about by
provisions which will permit both contrac-
ton and expansion as the varying needs OF
the several communities and business inter-
In circles where the subject has been dis
cussed In the last few days it was rumored
that Secretary Shaw has outlined the gen.
eral principles OF the scheme of elastic cur
under consideration by the financial eI-
perts who will be called upon to draft
bill. They were said to be as follows:
SECRETARY SHAW'S PLAN.
TT is proposed to authorize the issuance
of additional currency by national banks
y, to . per cent OF the amount OF their
capital.
"On this the Government would place a
tax of. say. per cent per annum. Be
cause 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 5 per cent to In
duce bank to go to the expense OF issuing
additional currency. The instant interest
rates dropped below 5 per cent this cur
rercy would retire automatically.
The two classes of finance reformers IN
Congress represent two ideas. The Western
men simply want to provide more money
when great crops are to be moved and
when settlements are to be made by West
ern merchants with Eastern manufacturers
and dealers.
The Eastern men. 1t is claimed are more
concerned in establishing the value of other
classes Of securities than Government bonds
and furnishing the basis for a permanent
increase of money which can be used in the
great promotion schemes of Wall Street.
There is likely to be sharp division of
opinion in Congress over the subject Of
financial relief. There is no other subject
upon which statesmen are more ,atolerant
than the measures Of financial relief which
they espouse.
There will be much debate and discussion,
without doubt. and the possibility Of event
ual failure to agree with collapse of all
plans.
1t is said. however. that II the President
and Secretary Shaw have agreed upon a
financial bill. and If the President finds 1t
compatible with all the circumstances Of
the case to recommend the bill definitely in
a message to Congress there IS possibility
Of compromise. which will give at least a
partial measure of relief to the many in
terests clamoring therefor.