The sun. [volume] (New York [N.Y.]) 1833-1916, 1903-09-27
SHAW EXPLAINS HIS SPEECH.
TELLS WHAT HE MEANT TO SAY
TO MARYLAND BANKERS
says He Did Not Advocate New Issue Of
bonds as = Basis OF Bank Circulation
and Did Not Favsr an Asset Currency
THE Wind out Of the Aidrich Dtll.

The Wind out Of the Ahrich Dnl.
WASHINGTON Sept "s.-Secretary OF
III. Treasury Shaw made an explanation
TODAY of some points In the notable speech
he delivered before the bankers OF Mary.
land and the District of Columbia on Thurs
day night No speech that Mr.. Shaw
has made since he became Secretary OF
the Treasury has caused a. much comment
in Washington among Treasury officers
and bankers
Many persons have gathered from his
remarks that the Secretary is in favor OF
issuing new Government bonds to provide
a basis for bank circulation, that he would
encourage banks to use part OF their re-
serves in time Of emergency, and that he
is at last in favor Of an asset currency Tor
national banks. Only one Of these a.
symptoms, according to Mr.. Shaw's state-
ment to-day. is true.
|, has been inferred also that Mr.. Shaw
is in favor Of at least one feature Of the
Fowler Currency bill. and that his remarks
will seriously embarrass the members q
the Senate Finance Committee in their
efforts to pass substitute for the Aldrich
bill at the extra session Of Congress which
will convene early in November.
Mr.. Shaw bald to-day that he had not
advocated new issue OF Government
bonds as a basis OF bank circulation. but
that he had merely called attention to the
fact that bonds at present were scarce and
high in price, and that il bank circulation
is continued, new bonds will have to be
issued or some substitute for bonds de-
vised. This. he says. WAS by no means
declaring for further issue Of bonds:
will have to be found" that has led to the
conclusion that the Secretary favors some
form of asset currency, although ne mss
been known as a firm opponent OF that
system. MIR. Shaw said to-day, however.
that it must not be assumed that he has
Joined the ranks Of the advocates OF asset
currency. 80,
The main provisions Of the Aldrich bill
a. prop, sed during the last session OK Con.
gr,ss, are that the customs receipts as well
as the internal revenue receipts be depos.
tied In national banks at the discretion OF
the Secretary Of the Treasury, and ina!
State and municipal bonds be accepted
by the Secretary Of the Treasury instead
OF Government bonds as security for pub
lie deposits.
These persons who believe, as they say.
that Secretary Shaw in his recent speech
and by his recent actions has taken the
wind out of the Aldrich bill point to two
strued the present law as allowing him
10 accept State and municipal bonds as
security for public deposits, and ne mas
also construed the law regarding the de.
pcsis as allowing him not only to deposit
current receipts from internal revenue,
hut to segregate receipts Of this characte.
that have been collected for long period
an, rlernsit them in the banks.
This action. il is maintained, which 10
based on a method Of Treasury bookkeep-
ing which Mr. Shaw thinks is perfectly
legal, makes it unnecessary to enact
law permitting the deposit OF customs re-
ceipts 1t is held that the Secretary Is
already accomplishing the same end by
an ingenious. although perfectly legal con-
struction of the existing statutes.
There is belief in some quarters that
Secretary Shaw's action will be used TO
advantage this fall by the opponents OF the
Adrich bill, it being possible for them to
show that the Secretary is already &C.
comhlishing nearly all that the Aldrich
measure could.
Mr.. Shaw explained this afternoon what
he meant by his talk the other day about
bank reserves He said he wished TO en-
courage bankers to maintain their reserves
in times Of ample money, and to use them
in time OF emergency. He said he haa
thought of sending to the bankers an al
inanac each season calling their attention
10 the fact that the crop moving season
was coming. The time for reserves to
be kept up, he says, ia before periods OF
tight money. The time TO let them down
is when large volumes Of money are needed
in crop moving seasons and in other emer-
gencies. Yet the Secretary admits that
the human tendency Of bankers Is to re-
verse this process.