Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1906-01-05
EAT DANGER IN ITS lNElASTlcIN
Panic L. Sure to ONE Unless Necessary
Changes Are Made.
SPEECH CAUSES SLUMP IN STOCKS
Metal and Leading Railway Shares Drop
0ns TO Three Points.
SHA%S PLiN DECLARED INADEQUATE
Extra Funds Provided by II wouId
Go Into Speculation Instead
OF Into Legitimate
business.

'''' instead
OF Into Legitimate
business.
NEW YORK. Jan. 4-Cnless there is cur
rencN reform panic beside which former
panics will seem insignificant was predicted
by Jacob II. schifr, head Of the banking
hrm OF Kuhn, Loeb & Co. in a speech he
fore the New York Chamber OF Commerce
today. MIR Schirf said he did not regard
such a panic as imminent, but believed IL
VIII come unless something is done 20
remedy the lack Of elasticity of the present
currency system He declared that he did
not IaNor the plan proposed by Secretary Of
the treasury Shaw for relief of the situa-
uon' 1t being his opinion that the secre.
tarys plan would aid speculation ratbe,
than legitimate business.
Mr.. Schtn favored a currency based on
commercial paper as more helpful to the
general business interests of the country.
speech Causes Sensation.
Inc speech created a sensation in flnan-
cia' circles and caused a sharp break in
prices on the Stock exchange. The n,eettny
or the chamber was attended by a Iaryo
number of business men and fnanciers. and
resolution on the subject offered by Mr.
ochlH was unanimously adopted This reso
luton was:
r,ittSo {ittsoNed' That it be referred to the COM
IIho,rc,It uI nlahce and currency Cof the
Cnamber or Commerce. to consider Tho rec
urlnlehhatlon ON, of the secretary of the treas
T,S nS MADE IN his report to congress dated
december 8, 1906, to permit national Sants
10 issue volume of additional governneni
guaranteed currency equal i'm anno,Int tn ~
per cent to the bond secured currency ,naiD
salneu by them, but subject to "A tax OF or
per cent until redeemed Re 1t further
fhn 10.
ana currency submit report at the neSt
monthly meeting of the chamber on The
seCretar,i talrSh'lSned nf recommendation OF the
any other different measures which tha
I'm, cfTIi,ilIttee may be able to suggest as EN-
Glent ti and practicable for the attainment OF
o.e purpose for which the recommenda ton
on , tne secretary of the treasury has been
submitted to congress.
Cnuses Panic In Stocks,
"heh the tenor of Mr.. Schin's remarks
oecame known in Wall street the effect
was SHOWN almost instantaneousy In the
stock market There was a pressure 10
sell and support to prices seemed entirely
lacking. resulting in an uniuterrupted de-
cline up to the close, which was active and
weak The shares most vulnerable were
those which have been the leaders in the
recent bull speculation, especially The metal
stocks.
Anaconda fell to S51s points below last
night and rallied !, closing 3Ila lower.
Other losses We're:
Analgamated Copper, 3as; st. Paul, IL:
Chicago Northwestern, 2; Delaware q
Hudson, 4; General Electric. eIl: Great
Northern preferred 3; Louisville a Nash
vile. Ia; Northern Pacific 2: PEOPLES Gas.
IA; Reading, 2, and Virginia Carolina
Chemical 2L
lhese declines occurred in spite OF the
fact that call money, while still irm was
easier than for some days loans having
oeen made as low as per cent
schiT supplements Statement.
After the close of the market Mr. Schir
made this supplementary statement:
MY remarks were dictated simply by th,
conviction that something must be done 10
correct our inelastic currency SYSTEM IN
aster.
II the president could he made to see
that this is question of vastly more i'm
portance TO the material interests of the
ton, to which he has devoted himself with
such admirable energy. congress would
soon start work 10 remedy our circulation
evil In manner which would safeguard
our prosperity.
MIR. schin's speech.
In the course of his remarks at the
Chamber OF Commerce. Mr.. Schiff said:
We have witnessed during the past sixty
days conditions I'm the New York money
market which are nothing less than a dis
grace to any civilized country. There must
be a cause for such conditions. 1t cannot
be the condition Of tho country itself for
wherever you look there is prosperity
prosperity ~ we never had ii before. IL
cannot be that the speculation which pros
perity always brings forward can be the
sole reason for The conditions. Other coun-
tries have had wider speculation than the
United States.
In France, in Germany. in England.
speculation is, rampant. The cause is the
insufficient elasticity Of our circulating
medium. Last year | went to tho secretary
Of the treasury and said to him: 'sThe
national banks are gorged with their de-
posits Take out some Of those deposits
will seek other countries. Make yourself
strong now don't wait until the time comes
when you must make yourself strong"
Schin's Advice to shaw.
The secretary answered me and said hs
did not wish TO Withdraw any deposits now
for he did not want 20 have the funds with
drawn when deposits might be needed, and
he said he feared the criticism of the press
Then what happened was, that he left the
larger part Of his deposits in the bank until
last autumn. Last autumn he needed
money. and the country needed money TOO.
and at that time M" deposits became very
much reduced. lie did not deposit now, when
probably twenty-five or thirty or forty mill
lions would have changed the entire state
OF anairs-fOr il is only the last twenty
fivc or thirty millions that are wanted that
determined tho high rate. He did not de
pOsit. not because he uiG not want TO mix
up money matters. but he could not spare
the money. II he had strengthened him
self when money was less stringent. we
would have seen another condition now:
for the secretary Of the treasury would be
In a position 10 help the money market, IL
/ may use that expression, and, as much
as ] am opposed 20 helping the sub-treas-
a system as that the Eub-trcasury Is the
depository NJ the money 50 long the sub
treasury must play the role which the
Bank Of England PLAYS IN the money mar
ket of England. ] do not like To play the
role Of CdSsandra. but mark what / say
N this condition Of AFFAIRS Is not changed
and changed soon. We will get a panic In
this country, compared with which the
three which have preceded IA would only
be child's play. There IL no disaster soon
upon us; don't misunderstood me, but this
Is the time to prepare for Il.
II the president will only put part OF the
energy which he has SO admirably put into
Tic aiIemnl 10 rngnLaLo rallrnad ralna inin