Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-12-06
3I.S44.92T.1s
To Make Currency Elastic.
Gf.O1632n.oG

Secretary Shaw refers to the necessity
for an elastic currency as emphasized by
the financial conditions of the last few
months. Extremes of high and low rates
for money. he believes, should be rem
dered impossible. He consequently makes
an important suggestion to give elasticity
to the currency. lie says:
"As Il means to this end, j suggest the
advisability of permitting national banks
to issue q volume of additional govern
tnent guaranteed currency, equal IN
amount TO 90 per cent of the bond-seg ured
currency maintained by them but sub
tect to a tax Of or per cent until re-
deemed by the deposit OF like amount IN
the treasury. by eliminating the words
secured by United States bonds deposited
with the Treasurer of the United states
from national bank notes now authorized
the additional currency would be ident-
cal in form with that based upon de-
posit of bonds. and its presence would not
alarm for it would not be known. No
new and distinct or unguaranteed form OIL
money should be injected into our system.
INC tax would be ample, and more than
ample to cover the risk to the govern
ment in guaranteeing redemption. Mani
festIv this additional currency would not
suring into being until interest rates eN-
ceeded 9 per cent, and it would as prompt
Iy retire when rates became normal
Under these or any similar provisions ~
per cent money would be WeIl-hlsh I'M.
POSSIBLE and the Treasury Department
would be saved most embarrassing re-
sponsibiIity. This may not be the only
means of adding an element of elasticity
to our currency system, the need of which
is universally recognized. / suggest 1t as
the plan which to my mind seems most
feasible and one fraught with no danger"
Proposed Hall of Records.
AS to q hail of records, the Secretary
says:
."rhe litigation which involves a small
norton Of the site for the hall of records,
as noted in my report for the last fiscal
wear. vet remains unsettled: but IT Is be-
lieved that the matter viii soon be adj
justed and the title to the entire site
vested in the government
ut is therefore, recommended that the
plans submitted TO Congress for this build
ing be approved the limit OF cost be de-
termined, and an appropriation OF $780,
900 for preliminary work In the construcc-
,ion of the building be made, TO be avail
apIe upon the title being vested iii the
United States.
Panama Canal Bonds.
He calls attention to the fact that the
isthmian canal bonds are not available as
security for national bank circulation at
less than / per cent per annum tax. He
believes q general statute should be en-
acted making all future issues of govern
ment bonds available for national bank
circulation subject to a tax OF but one
halT OF per cent. as IN the ease Ol Iile
consols authorized by act OF March II,
1900
The customs administrative act and all
statutes governing the collection of GUS
toms could be revised to very great ad-
vantage and various recommendations to
that effect are made.
For the purpose of providing the people
of localities distant from subtreasuries
with cleaner currency Secretary Shaw
recommends such legislation as will place
upon the government the cost of trans
portation to the treasury for redemption
Of worn and mutiiated United States
notes and certificates below the denom-
nation OF SO.
The Secretary says that the revenue
cutter service is badly in need of more Of
ficers and that the vessels ought to be
equipped with wireless telegraph instIu-
ments.
Drawbacks on Exports.
When American manufacturers export
the product OF American labor. thus plae-
ing II beyond competition, with others
within the American market they should
have the limit. inedrawbacks of encour-
agement in the way of imported cheap
raw material and the right OF substitu-
tion
The Secretary says that the gold in the
treasury including the reserve and trust
funds October .. 1905, amounted to $T39.-
SOS, 600.36-a sum never equaled in our
annals; nor has any other government
ever held so much Of the precious metal