Evening journal., 1906-12-05
INCREASE RESERVE
OF THE BANKS
Retiring Secretary. Shaw Also
Declares For Elastic Cur
renCy Legislation
HEALTHY FINANCIALLY
BY our own wire. publlshers' Press.

Shaw's fifth and last annual report was
sent to Congress to-day, and discusses
in an interesting manner the neoes-
sity for currency legislation. The
Secretary describes the emergencies
that have arisen in the financial world |
during the last nve years and the var
ious and In some cases unusual meas
ures which the Treasury Department
has adopted TO afford relief. After
pointing out how narrowly the coun-
try has escaped from financial panics
on several occasions. and discussing
several ways Of improving the cur
rency system he says: ''rhe failure 70
provide some prompt means OF relief
Will most certainly invite disaster"
Describing the acute condition re-
sulting from the harvesting of the
enormous crops OF this year. the ina
lbility OF the railroads to handle them.
and the necessity Of providing money
with which 70 carry Them I'm storage
until they can be exported. the Secre-
tary toi.s how the Treasury came TO
the relief Of the situation By facilitate
ing the importation Of s5O000.OO0 O
gold and distributing in addition $780,
100000 among the banks all over the
countrs
Sensational writers told the people"
he says. that all this was being done
for the encouragement Of speculation
In Wall street. If those who recognize
that a deposit Of money at Denver re-
lieves financial tension IN Wall street
will acknowledge that a deposit in
New York relieves financial stringency
lat Denver no material harm will en-
sue. Money is almost as liquid as
water and finds it level about as
quickly.
1T is never possible" the Secretary
loontinues. "to measure the influence
OF treasury transactions such as are
here described. nor TO state what our
Experience would have been had the
Treasury failed to act in that great
crisis. One man Of very large experi-
) ence. with business interests IN sew
eral States, who never made a specu-
! lative transaction I'm stocks or bonds,
recently expressed the opinion that but
for the precautionary measures adopt
: ed by the Treasury the price Of every
/ bushel OF grain in the United states
would have declined ere this 10 cents.
For More Elastic Currency.
Urging the need Of congressional leg
islation to provide a more elastic cur
rency the Secretary says. despite di-
vergent views as 10 the methods, there
is well-nigh universal agreement in
, recognizing the necessity Of a Cur
= rency system that will contract when
f, money is redundant as promptly as il
will expand when money Is scarce"
He points 10 the facr that most com
mittees which have reported on the sub
ject endorse his previously recommendo,
plan OF Authorizing additional nationa
bank circulation 20 be issued in times o
extraordinary demand and subject to
heavy tax TO ensure it's Withdrawal al
soon as the demand ceases, AS for th'
adoption Of credit currency for permanent
maintenance. he says: Il would not view
even with apprehension If evil any credi
currency legislation SO restricted as e
render impossible the permanent mainte
nance Of more than s2oO.CcO0OO.
Disapproves Of Government Bank.
The secretary does NOT approve the sug
gestion for the establishment Of a centra
! government bank He says such banl
would be governed by a board. the mem
bers of which would doubtless have out
5 side interests. and each could shift the re
sponsibility from himself to the board al
an aggregation.
Remarking on the utter lack Of co
operation among the banks the sccretar.
urges that the Secretary Of State SHOULD
be given authority TO require all banks, a
! certain times fixed by him. 20 slightly ar,
the same within their own vaults. wit
corresponding authority TO release tn
same from time TO time as in his iudg
q ment win best serve the business interest
+ Of the country As an illustration h
Il says that 81 the national banks were com
e PEELED TO increase their reserves one pc
Il cent. OF their capital stock every ffteo
e days from April to September ]. II woul
# work no hardship under ordinary cond
e tions during those months, ana woud n
= suit in the collection of ssoOlOooO Of r'
is serve money to meet demands Of N
l. creased business required.
e Operations Of the Treasury.
The mex result Of the oidinary transa'
tions Of the Government for the nsc.
year 1906 was a surplus Of s25,6ss go. 81 q
compared with a deficit OF I25oOl 22S6) fc
y the preceding year. The interest-bearin
public debt was Increased $500. and II
= debt bearing no interest SiO,165,O75.2
caused by net additions Of lawful none
10 the natlonal-bank note redemptic
fund. The Increase Of the debt prop
" was slO1e5,S55eo. y
.. The trust funds increased $52 SS0.s0o. ar
p amounted to $i.O44.6Ss. $50 at the close
he the fiscal yearsasos
)n For the first quarter Of 1907 the revenu
n were S., 81. .S1i27 in excess Of the expe
e. ditures, while in the first quarter OF IL
j. the expenditures were 1854. .2f.56 in exec
H. OF the receipts.
v. There was an increase OF SlS6.S6577
oi the monetary stock of the country durii
H. the last fiscal year. The growth in go
.. was si1So5o.777, in silver s5.t50ses, and
- national bank notes s65. 392.55i, VIII
u Treasury notes declined S2,O-7Op
- The money in circulation July 1, 10
~ amounted TO s2.736,6is,s23. a per capita G
a., culation OF sS2s2 BY October the tot
~ circulation had Increased to s2,s12 1888, G
F OF ssSos per capita is.s per cent OF Il
"a amount being gold
RI The Treasury holdings Of gold az 4
II close Ct tho last fiscal year was Nolc5
II 600 30. BY October u THIS increased
g. SSH. .Ss2. .Sg9.77. the largest amount Of Z
precious metal ever held IN the Treasur,