The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1903-09-29
SHAW'S PLAN
FINDS SUPPORT
AND CRITICISM
Local Bankers Differ in
Opinion on Scheme
to Avert PanicS.
NO TEST THIS YEAR
Use of Bank Reserve Only
Operative in Time
of Need.
NO TEST THIS YEAR

COnrlctlng views are taken by the
leading bankers in Washington on the
merits and wisdom of Secretary Shaw's
speech delivered before the joint con-
vention of the Maryland and District
Bankers Associations on their trip
down the Potomac. The address is look
ed upon as the most significant that ne
has made since assuming the duties of
his present office.
The remarks of Mr.. Shaw on the use
of bank reserves in times of urgent
necessity are exciting extensive com
ment. The suggestion is criticised ad-
versely and also looked upon as a con-
servative way to avert disastrous money
pinches- Prominent local fnanciers
show a pronounced diversity of opinion
on the question. and different views are
held throughout the country by those
interested.
For Emergency Use Only.
In his address Mr. Shaw made it forci-
bly, plain that he believed the reserves
should be used without question when
the emergency arises. Coming from the
Secretary of the Treasury the sugges-
tion assumes great Importance, and
practically reveals the attitude of the
Administration on the financial ques-
tion.
Fearing that his remarks might be
mIsinterpreted. the Secretary is anxious
TO emphasize also the fact that he
wishes to encourage bankers to main
tain their reserves when no pressing de-
msnd Is made for it. With the approach
of the crop-moving season there will
soon be a heavy call for ready money
and ia view OF this he will probably
send out circular to bankers each sea
son calling their attention TO the fact
Whether they use their reserves then te
ameliorate the conditions will be purely
optional
Advantages of Plan.
Those who favor Secretary Shaw.
scheme for the use OF bank reserve:
agree with him that no harm would
result from the temporary distri-
button Of a portion of the re-
serve. Seldom are banking institu.
tiOns in position to keep the reserve,
to the required level always. and If tn.
break is permitted when the circulation
of cash is needed the result would b,
more satisfactory generally than serious
according 10 the view Of this contingent
Financiers who agree with the Seere.
tary OF the Treasury on the present is
sue point TO the distress that could b,
relieved IL the plan we're put into oper
alton in times Of an emergency Wer,
depositors of a bank to make urgen
requests sor loans In such a period
aud to accommodate them the institu
tion should be compelled to call on il
reserve. Il would be aiding genera
prosperity. they declare, to deviat
from the usual custom
Views of Opponents.
1T is carrying the thing too far
epitomizes the opinion OF the othe
element The recommendation is no
altogether sound. they say, and ther
is great, risk in establishing such
precedent. The reserve money ough
to be held intact until the very las
moment when a collapse is threatened
The plan is not considered eonserva
tive.
With the declaration OF Mr.. Shaw
however. that no striDgency VIII occu
this fall. there is no likelihood tha
the scheme will be put into operatio
this season. Whether it receives m
stamp Of approval or is unfavorabl
looked u2on, will be told only by th
action OF banks when the emergen
arispE