The daily morning journal and courier., 1905-12-14
SECRETARY SHAW ON THE
 ELASTICITY OF CURRENCY
SOMETHING OTHER THAN BOND SECURED CIRCULATION MUST
 BE PROVIDED.

Present Currency Does Not Respond to
 the Varying Needs of Seasons and
 Loealities-Against Any New Form
 of MOney-Recognizes That Popular
 Impression That New York Ranks
 Are Solely Responsible for the Pre-
 vaIIing High Rates of Interest.
 Buffalo, N. r., Dec. 13.-Leslie M. Shaw, secretary of thetreasury, and George Tate Blackstock Of Toronto, Ont, one of the leading lawyers in Can ada, were the principal speakers at the annual banquet of the Buffalo Cham Der of Commerce here tonight.
 In urging the importance of adding the element of elasticity to the cur rency system, the secretary said:
 While our currency is the most con- venient and as safe and stable as any in thet world, it does not respond to the varying ms eds of seasons and localities.
 If this element of elasticity is to be added something other than bond se- cured circulation must be provided.
 T deem it very im2ortant that no new form of money be authorized. 1t is no imposition on the public to be offered government guaranteed note in lieu of a note secured by a govern ment bond, but it might alarm the GUS toners of a bank to know that condi- tions justified it in resorting to cur rency taxed at six per cent. Some of our worst panics have been sentiment al The element of elasticity must work automatically and unobserved, otherwise more harm than good will ensue.
 Existing conditions at New York emphasize the need of some provision for supplying the elementsof elasticity. recognize the popular impression that New York banks are solely responsible for prevailing high rales of interest. I will not attempt to apologize for the banking fraternity, but willingness to loan every available dollar has not been confined to New York, nor has the disposition to borrow every dollar obtainable been confined to stock spec ulators.
 "The western banker who sent his money to New York in midsummer to be loaned on call, regardless of rate, has legitimate right to call it home He must not be criticised for so do- ing, nor must he be surprised at the naturally and inevitably follows it's withdrawal.
 '"rhe spirit of speculation, rife dur ing the summer was fed and intensi- fled by the unusual influx of money from the Interior and the west. Who is to be censured? I answer, all or none. The man who loans to stock speculators on satisfactory security is no better and no worse than he who loans to the real estate speculator on Satisfactory terms. It was we'll known in July that money would be scarce in the fall. If the treasury department had not foreseen what was coming, and called in few millions from the deposits then held by the banks to be used to relieve this strlngency, should it extend to the prejudice of legitimate business, there might be some slight reason for distrust. I think, however, the business interests of the country understood that the treasury can easi- ly spare $20,o00,000 and more if nec- essary for the relief of legitimate bus iness and I think 1t general under stood that it will not be released un- less business conditions demand it.. The responsibility Is not thing to be coveted, and I therefore plead, not for imitation, but for such modification of our present currency system as will cause it automatically to expand to meet the increased needs of varying seasons and as promptly contract to the legitimate surbng of unwarranted spedulaton."