The Washington herald., 1906-12-30
SHAW DEFENDS ACTS
Replies to Criticism Of His
Financial Policy.
NEW YORK BANKERS LAUGH
Declare His Defense Indicates An
other Move TO Aid wall Street out
Denies Speculation Is Cause of the
stringency-Europe Afraid of Us.

Secretary Of the Treasury Shaw yester-
day gave an emphatic answer to the crit
les who have objected to his policy Of re-
lieving stringencies in the money market.
He denied that the benefciaries Of these
practices were the bulls and bears of Wall
street, and declared that he had acted
solely for the best business interests Of
the country
Skeptical New York bankers, however.
read his defense and somewhat cynically
remarked that this evidently means an
other move for the relief Of Wall street"
The claim that speculation in stocks was
not responsible for the stringency was
laughed AT.
The Secretary's views were brought out
by letter from Nashville, Tenn, which
he answered and then decided to make
the answer public.
The letter Of inquiry he received reads:
Dear Sir: Pardon this letter ] hope
il viii receive due consideration. If not
an answer. I have so often noticed the
relief given the stock gamblers in New
York by the government I do not see
what right the government has to do this
How much longer will the Treasury come
90 the relief Of the gamblers and money
sharks? They are the real cause Of high
money i'm New York You know il is like
this. The big game sell stock. call loans
make tight money, stocks go down. suck
ers lose. big game make their millions.
am simply common. everyday man. and
may be- wrong in my conclusions but
think not I see they are after you again.
Some people are hard 10 please. With
kind regards
Secretary Mikes Reply.
Secretary Shaw's reply is as follows:
Dear Sir: Your letter Of December 3
is received. and l note your sentiments
with respect 10 stock gamblers Your let
ter is so courteous ana voices so accu-
rately the view of many well-intentioned
people that ! am constrained to answer il
somewhat 1T length.
You seem 10 proceed upon the theory
that the existing monetary stringency is
caused solely by stock gambling. In this
You are IN error. Some people gamble in
stocks. some i'm cotton. others in wheat.
corn, pork or lard. and some in land.
When times are good people will specu-
late in anything and everything that pos
Sesses a market value The proportion Of
speculation as compared with necessary
and legitimate business is very small
however. and is probably no larger In
New York City than in Nashville, Tenn.
where you reside. OF i'm DenisOn. Iowa,
where ! live. The best estimates I can
get place the amount OF speculative trans
actions in New York City at from 2lz to 3
per cent OF the aggregate.
The Treasury has never come to the
relief Of stock gamblers. and probably
never viii. though the relief which the
gamble on the bun side Of the market.
the corn market, and every other market,
but il is equally harmful to those who
gamble on the bear side Of these respec-
tive markets
Both Seek Relief
Both bulls and bears importune the Sec
Rotary of the Treasury. but the nature Of
the advice usually indicates the side OF
the market on which they are operating.
Naturally, those communications have no
influence whatever. The real business sit
uatiOn is the sole consideration.
If you will stop 10 consider you will
realize that more money IS needed when
the crops are being marketed. when the
factories are filing their warehouses with
cotton and wool. hemp. sisal. lumber. and
every other material than during the sum
mer, when the crops are growing and
when business men are enjoying their va
cations. There are over fifteen thousand
banks I'm the United States doing com
mercial business. They are independent,
the one of the other and each is trying 70
make dividends Few Of them in mid
summer make ample provision for the fall.
They time their loans so as 10 meet their
obligations and take their chances. Dur
ing the dull season Of 1905 the Secretary
Of the Treasury withdrew $50 900. 900 of the
peoples money and locked it up. This
would have been a crime if he were not
willing TO release it now when il Is needed.
BY appropriate use Of the money in the
vaults Of the Treasury, I have facilitated
the importation OF a hundred millions Of
gold within the last nine months. and have
released, or arranged for the release. Of
fifty millions more. This was done. as l
say. for the purpose Of aiding legitimate
business, though it has helped the bull
side Of the market as much as il has dam
aged the bear side l care as little for
either consideration as do you. but I am
intensely interested in the appropriate
business interests of the country.
Money Scarce Now.
Is
best business houses in the United States
with International credit are now paying
per cent interest for money with which
to do their appropriate business. If
money could be secured anywhere be
meath the sky for less, they would know
it and borrow it. 1t is for the relief Of
business that the Treasury has restored
to the channels Of trade the money
which it Withdrew when the people had
no use for it except for purposes Of
speculation II was then wanted for
speculation. and I withdrew It. It is now
needed for business. and restore it. The
last SO 000 deposit went almost exclu-
sively to the cotton-producing States, and
the exceptions went to the cotton-buying
cities.
Yours, very truly,
L. NJ SHAW"
There is reason to believe from infor-
nation received at the Treasury Depart
ment that when the time comes, July
next, for the redemption of the outstand-
ing 4 per cent bonds, the Treasury De-
partment VIII decide TO pay cash for them
rather than refund them into bonds al a
lower rate Of interest. There are Sis, 0OO,-
900 of the IS outstanding
SkcpticaI in New York.
New York, Dec. 29.-New York bankers
read with interest tonight the statement
Of Secretary Shaw. Mr. Shaw's declara-
ton that the monetary stringency was
not caused by stock speculation was the
source of some amusement. The state
ment was taken to indicate clearly that
the Secretary viii again come to the relief
Of Wall street. which has been badly
shOken by a money shortage in the last
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