The Washington herald., 1906-12-06
Mr.. SHAW URGES REFORM
Reports Necessity of Elastic Cur
rency Legislation.
Message Is His Last One-DeScribes
vestinE Enormous Crops.

Secretary of the Treasury Shav's fifth
and last annual report which was sent
to Congress yesterday. discusses in an
interesting manner the necessity for cur
rency legislation.
The Secretary describes the emergen-
cies that have arisen in the financial
world during the last five years. and the
various, and, In some cases. unusual
measures which the Treasury Department
has adopted to afford relief. After point
ing out how narrowly the country has
escaped from financial paHics on several
occasions, and discussing several ways
.of improving the currency system, he
says. The failure to provide some
prompt means Of relief Will most certain
" invite disaster"
Describing the acute condition resulting
from the harvesting Of the enormous
crops Of this year. the inability of the
railroads to handle them, and the neces-
sity Of providing money with which 10
carry them in storage until they could be
exported, the Secretary tells how the
Treasury. came to the relief Of the situa-
ton by facilitating the importation Of
100000 Of gold and distributing in addi-
tion S26000.O00 among the banks all over
the country.
Not To Encourage Speculation.
Sensational writer's told the people, T
he says. 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 fnan-
cial tension at Wall street viii also ac-
knowledge that a deposit in New York re-
lieves financial stringency at Denver, no
material harm viii be ensue. Money is
almost liquid as water, and finds its level
about as quickly"
1T is never possible" the Secretary
continues, TO measure the influence Of
Treasury transactions such as are here
described. nor 10 state what our expert
ence would have been had the Treasury
failed TO act in a given crisis.
"One man OF very large experience
with business interests in several States
who never made a speculative transac-
ticn in stocks or bonds. recently express
ed the opinion that but for the precau-
tionary measures adopted by the Treas
ury. the price of every bushel of grain
in the United States would have declined
ere this ten cents"
Needs More Elastic Currency.
Urging the need Of Congressional legis-
lation to provide a more elastic cur
rency, the Secretary says: Despite d.
vergent views as to methods. there is a
well-nigh universal agreement in recog-
nizing the necessity of a currency sys-
TEN that will contract when money is
redundant as promptly as it viii expand
when money is scarce"
He points to the fact that most COM
mittees which have reported on the sub
ject indorse his previously recommended
plan of authorizing additional national
bank circulation to be issued in times of
extraordinary demand, and subject to a
heavy tax to insure its withdrawal as
soon as the demand ceases. As for the
addition Of credit currency for permanent
maintenance. he says:
Il would not view even with apprehen-
sion of evil any credit currency Iegis,a-
tion so restricted as to render impossible
the permanent maintenance of more than
S200 e00,000,"
Does Not Want Central Bank.
Tie Secretary does not approve the
suggestion for the establishment OF a
central government bank. He SAYS such
Ia bank would be governed by a board,
the members of which would doubtless
have outside interests and each could
shift the responsibility from himself to
the board as an aggregation.