The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-12-06

10 carry them until they could be exported.
Under plain and unequivocal authority OF
law, and without a penny Of expense TO the
Government, approximately another $780,
000, 900 OF gold was brought from abroad
and turned into the channels OF trade.
In addition, see, 900, 600 Of the money with
drawn in midsummer was restored. or this,
5000, 600 was given to New York city and
the same amount rendered TO chicago, a
part of which was declined, however, be-
cause the banks found it impossible to
borrow the bonds with which TO secure II
and Improbable to buy them. Boston,
Philadelphia, st. Louis and New Orleans
each received 81, OOO, 900: Baltimore, Louis
vile, Kansas City, Cleveland and Cincinnati
81 200, COO each; Pittsburg, Buffalo, Mime
apolis, Milwaukee, Detroit, st. Paul, Omaha,
Des Moines, Denver. Sioux City, Memphis.
Peoria, Atlanta, Nashville and Sioux Falls
approximately $500 600 each. Meanwhile
sensational writers told the people that all
this was being done for the encouragement
of speculation on Wall Street.
IF those who recognize that a deposit OF
money at Denver relieves financial tension
at Wall Street will also acknowledge that a
deposit in New York relieves financial
stringency at Denver no material harm
will ensue. Money il almost as liquid az
water. and finds its level about as quickly
AS TO CREDIT CURRENCY.
As to the a~dvisability of the issuance OF
what is commonly called credit currency,
the Secretary says:
Much can be said in favor Of credit
currency for permanent maintenance. The
addition thereof to our present currency
system has been urged for half a century.
MANY bills have been introduced embody-
ing the plan: Congressional committees
have from time 70 time made favorable
reports thereon; and it has quite recently
received the unqualified Endorsement OF a
Joint committee representing commercial
and banking organizations and composed
of men of the very highest business and
financial standing.
Eff a new currency system were being
devised unquestionably this plan would be
included, and it might possibly take the
place of the present bond-secured circula-
ton. No one now, however, recommends
it as a substitute. Those who favor it pro-
pose its incorporation into, rather than its
substitution for, our present system
Mr.. Shaw is opposed to the central bank"
scheme for the returning OF money col
lected by the Government into circulation
quickly.
NATIONAL BAN COOPERATION.
Mr.. Shaw laments lack Of cooperation
by the national banks which, he says, might
do a great deal to prevent sporadic money
amines if they would work together with
the object of preventing these phenomena.
On this subject the report says:
New York city has the only call money
market in the World, but so impossible Is II to
secure cooperation between the financial in
situations Of that great city that the current
rate on call money, as have already shown
on the morning OF a certain day was IL
per cent, with some loans as high as II
PER cent, while in the afternoon 1t dropped
to 81. per cent. During a part Of the previ-
Gus season millions we're loaned at l per cent.
and some below, and later in the season the
rate touched 100 per cent. IL must be mani
fest TO laymen even, as well as TO hnanciers,
that such want of cooperation, resulting
+ - - s-N---As "a
little encouragement 10 the hope that inter-
national balances in the near future will
be kept in this country. | do not %criticise
these banks for failing to cooperate, for |
have been repeatedly assured that coorera-
ton is impossible.
Another Indication Of the want of CO.
: operation, not only in New York city, but
quite as much throughout the country
generally, is discoverable in reserves.
| Admittedly. conditions have been no worse
in New York than elsew here, though the
weekly statement reveals conditions only
in that city. Re- peatedly within the last
five years surplus reserves have been prac-
tically exhausted in midsummer, and some
times the aggregate surplus reserve Oh the
associated banks in New York city has only
equalled that reported by a single institu-
ton. | must not be understood as express
ing an opinion that this condition indicates
any want Of conservatism, but l do know
that If there were the slightest measure OF
cooperation between the national banks OF
the country a very large reserve would be
gathered in midsummer to provide for in
creased business operations incident to the
crop-moving season and the revival OF
commercial activity annually witnessed
during the autumn and winter months.
uGGEsTs REsERvE
Whether cooperation can be secured
by statute is a question on which students
OF the situation will, of course, differ. |
| suggest for the consideration of Congress
two possible plans: First. a graduated
reserve, determined by statute, The OBJ
lection TO this plan is that conditions vary
with different seasons. Sometimes the
crisis is deferred, and occasionally the most
stringent season il during the spring. Sec
ond, a better plan, in my judgment, would
be TO clothe the Secretary Of the Treasury
with authority to require all banks. at
certain times fixed by him, to slightly and
gradually increase their reserves and hold
the same within their own vaults. with cor
responding authority TO release the same
from time to time as in his judgment will
best serve the business interests OF the
country"
In conclusion Mr.. Shaw says:
1T is hoped that the discussion OF several
ways by which the much-desired end may
be accomplished will not tend to bewilder,
but rather TO mak clear that the adoption
Of any one or more of them will work much
good, while the failure 10 provide some
prompt means Of relief will most certainly
invite disaster. Under the Constitution
it does not lie with an administrative officer
TO urge any one plan to the exclusion OF
all others. 1t il the duty OF the head OF
this department to point to defects, ana
he may suggest ways in which, in his opin-
ion, they can be cured. The legislative
branch of the Government must, in the
nature OF things, have credit for whatever
laws are passed, and il must likewise bear
alone the responsibility IL it fail 10 act after
threatened dangers have been clearly
defined"