The Oskaloosa herald., 1905-10-12
EMERoEN.y CURRENCY.

Sb. LOUIS JiODe.DemOCrAt. Like
everybody who has given any thought
TO the subject, Secretary Shaw la
ments the want Of elasticity Ia the
national bank note currency. Beng
based on government bonds, THIS cur
rency Is necessarily rigid In It's pro
portions. II is slow In responding 20
the changing needs OF seasons and
localities At the present moment,
and every year at this time, an add
tional amount OF currency is needed
in moving the crops from the prodlc
ers 10 the consumers. In time OF
normal activity. like 1905, there Is aot
10 be some pressure for money on this
account In the fall and early winter
months. In the spring and early sun-
mer, this distribution having been ac-
complished, money ordinarily becomes
too abundant for business needs. and
It drifts In large amounts to the 8
nancial centers, hndIng IT'S way finally
TO the codntry's ultimate reserve cen
ter, New York The problem Of max
Ing the volume OF the money automat.
ically expand and contract 70 meet
these varying conditions nas long *
erclsed the minds OF financiers and
statesmen. and many remedies rave
been proposed.
IN his address az Cleveland before
the Ohio bankers association Hecre,
tary Shaw suggested plan Will ~ VI
though not entirely new, Is sufficient
" different from most II the schemes
put forward IN recent years 10 attract
attention He rejects asset en-
and emergency currency, as these
terms are commonly understood he
also opposes the use OF clearing house
certificates which no says = nearly
as bad, In principal. az the free coin
age OF debased silver. The secre.
tary's plan to contribute a little elias
tlclty TO the circulation Ii 10 ALLOW
the national banks TO issue addition
amounts Of notes, In excess OF the
amount secured by government bonds
but not beyond so per cent of me
bonds, these notes TO pay a tax Of
or per cent TO the government for
the time they are ort, and the govern
ment, In consideration OF this tax, 10
guarantee their redemption The rev
issue OF notes need not be lnown 70
anybody except the comptroller Of the
currency and the banks issuing them
and the banks, under the pressure Of
tho high tax, would promptly with
draw them after the extra demand
ended.
OF course, as the secretary conce !,
en-, this would be sort Of an emef
gency currency, though not the dim
which he referred IN condemnation.
His high position in the government.
and the certainty that he viii urge
this plan, or something along the
same lines. IN mis- forthcoming report
10 Congress. viii command for II A
good deal Of consideration by tho
country. The evil which the score
tary complains Of is embarrassing.
Yet the problem OF combining elassi-
city with absolute and unquestlonen
safety IL diHicult. with all the do
fects, real and imaginary, which have
been charged against the national
banking system, the currency which 4
provides Is as good as any which tho
world affords. II Is the best currency
which the Uniteo ststes has ever
Rad. Moreover. II is growing con-
stantly in popularity. A prodIgIous
increase in IT'S volume has taken
place since the act OF 1900. which al
lows banks 70 issue currency 20 the
par value Of the bonds. and which per-
mits the establishment OF banks with
a $4,000 capital in the small towI1.
The rural districts Of the west aud
South have ayailed themselves large
~ Of this concession, and large
number OF new banks have been crea-
ted in the past flye years. The 5557
national banks, with circulation Of
$40. 900, 900. are an exceedingly val
uable element ia the country's assets,
and any intelligently devised plan to
work an Improvement in them de-
serves the attention Of the people.
such as Secretary shaw's scheme
win receive.