The Providence news. (Providence [R.I.]) 1891-1906, 1906-01-06

CURRENCY
REFORM

New York, Jan. 6.-Lyman j. Gage,
former secretary Of the treasury said
yesterday that ne agreed with Jacob II.
schiff i'm the opinion that a great pafic
Is inevitable unless steps were taken TO
remedy the inelasticity of the existing
currency system.
II gree positively with Mr.. Schin
said Mr.. Gage that the monetary con
ditionS which have existed in this cOun-
try during the last 90 DAYS are Disgrace
ful 10 the nation, and 1 further agree
with hi mthat "A stunning panic Is but a
matter OF time unless something Is done.
The more promptly and efectually this
is done, the better for the United States
From Mr. Schiffs attitude ! infer that
he thinks this panic may be precip!tated
very shortly. / do not exactly agree with
that conclusion. In my opinion there is
no immediate danger. but the danger
itself is apparent. and IL the cbuntry sits
passive under existing conditions the
country will suffer. / do not understand
how any careful and thoughtful fnancier
can fail To realize the peril"
Mr.. Gage said he favored Secretary
Shaw's plans for reform, and thought
that with certain notifications they would
be successful.
Mr.. Cages attention was called to the
statement by Mr.. Schin that the reform
or currency conditions Is more impor-
tant matter for the president to take up
than railroad rates. The former secre-
tary then said
HIGHEST PUBLIC DUTY.
81 regard 1t as the highest public duty
To provide a more elastic currency with
out moments delay. / would not under
take 10 compare the relative importance
of rate regulation with currency regu-
lation at this time. but / will say, and
say as emphatically as possible. that
believe the work of securing proper legis
lation to relieve the present circulation
conditions is a high public duty OF the
Frank A. Vanderlip. vice president OF
the National City bank. said today no be-
lieved Mr.. Schiff's speech had no ap,
Mr. Schiff thought" said Mr.. Nanderlip,
that there was any present danger he
certainly would not have regarded this as
an appropriate time TO call public atten-
tion 10 that danger.
'He Is undoubtedly right in saying that
some time our illogical currency system
will cause trouble. Ii has caused trouble
In the last six weeks. but the indications
are that the trouble is about over"
A. Barton Hepburn, president of the
Chase National bank and former comp
troller Of the currency. said that he did
not regard Mr.. Schiff's plan as prac-
ticable He said
Mr.. Shaw's plan 10 make the currency
more elastic is excellent. In this city, for
instance, this week the national banks,
with a combined capital OF slo4, ,000 600,
have circulation Of 50, 000, 600. Under
the Shaw plan they could increase their
circulation by nearly 1000 900. The abil-
ity TO expand the circulation by $500
900 in this city would always be enough
To keep down the abnormal money rates
and would be perfectly safe, but the Schin
plan would be neither safe nor practi-
cahIe.
Certainly, something has to be done.
We have no government bank to fall back
on and some way OF improving present
conditions must be found"
REPLIES TO CRITICISM.
When Jacob II Schiff was informed
yesterday afternoon that his plan had
been criticised as impractlcable he said
that perhaps he had not made himself
thoroughly understood He said he had
no idea OF trying TO initiate the currency
by issuing paper money against the COM
mercial paper already In the banks, but
his idea was merely 10 make more secure
the plan already advocated by Secretary
Shw. Mr. Shaw's plan, he said, ws a
proposal ii let each national bank Issue
80 per cent more currency than II now
issued without any security wha atever.
Mr. Schiff said he merely wished TO
have that extra so per cent OF currency
secured by the commercial paper in the
banks.
Mr. Schim added that he would not try
TO work on the details of the general
plan he had in mind, but he reiterated
that unless some sound scheme OF stretch
ing the currency in time OF need were
soon found by the National COVER lrnent
the next panic would be a disaster worse
than the United States ever before ex-
perienced.