The Montgomery advertiser., 1906-01-05
ELASTICITY
 IS NEEDED MT. Schiff Predicts Fear
 full Panic. SCORES SECRETARY SHAW The Prices of Stocks Tumble in
 Wall Street. Head of Big Ranking House Says cen- ditions of the Last Two Months
 arc 6 Disgrace to the

New York, Jan. 4.-Unless there Is currency reform panic beside which former panics will seem insignificant was predicted by Jacob H. Schiff. head of the banking firm of Kuhn, Loeb q Co, in a speech before the New York Chamber of Commerce today. Mir. Schiff said he did not regard such a panic as imminent but believed It
 will come unless something is done to remedy the lack of elasticity of the present currency system. He declared that he did not favor the plan proposed by Secretary of the Treasury Shaw for relief of the situation, 1t being his opinion that tho Secretary's plan would
 aid speculation rather than legitimate | business. Mr. Schff favored cur rency based on commercial paper as more helpful to the general business Interests of the country.
 The speech created a sensation in financial circles and caused a sharp
 break in prices on the stock exchange. The meeting Of the Chamber wasf at tended by large number of business
 men and inanciers. and resolution on the subject offered by Mir. Schiff was unanimously adopted. The resolution
 was as follows:
 schifr's Resolution.
 Resolved, That 1t be referred to the L C0mmIttGG the Chamber of Commercel to consider the recommendation of the Secretary Of the Treasury. made in his report to Congress dated December 6, 1905. to l permit national banks to issue volume of additional Government guaranteed currency equal In amount to 50 per cent. of the bond~secured currency
 maintained by them but subject to a tax of per cent or per cent. untii redeemed.
 "Be 1t further resolved. That the Committee on Finance and Currency
 submit a report at the next monthly meeting of the Chamber upon the afore-
 mentioned recowpendatlon nl tne ssu- retary of the Treasury, together with any other different measurea which the committee may be able to suggeet as efficient and practieable for the attain ment of .he purpose for which their ! recommendation of the Secretary of the
 Treasury las been submitted to Con- | gress'
 TumbIIng of Prices, When the tenor of Mir. Schiffs re- marks became known in Wall Street, ! the effect was shown almost instan- taneously in the stock market. There was pressure to sell and support to prices seemed entirely lacking, resulting | in an uninterrupted decline up to the close, which was active and weak. The | shares most vulnerable were those | which have been the leaders in the re- | cent bull speculation. especially in l metal stocks. Anaconda fell to 30 1-2 points below last night and rallied one. | Other losses were; Amalgamated 1 Copper. 8 3-S: St. Paul. 1 1-4; Chicago | and Northwestern. 2: Delaware and l Hudson, 4; General Electric. Is; Great 1 Northern, preferred. 8; Louisville and Nashville. 1-4; Northern Pacific, 2;
 Peoples Gas. Ii; Reading, 2, and Vir-
 glnia-Carolina Chemical. 2l-S. These declines occurred in spite of
 the fact that call money. while still firm, was easier than for some days,
 loans having been made as low as l per cent. After the close of the mar | ket, Mir. Schiff made this supplement | tary statement:
 | Baby Playing Giant. My remarks were dictated simply
 by the conviction that something must he done to correct our inelastic cur | repcy system if we arc not to run in
 time into great disaster. We are try l ing to play the role of giants while
 still In our swaddling clothes.
 If the President could be made to | see that this Is a question Of vastly more importance to the material Inter ! ests of the country than that Of rail | road rate legislation to which he has l devoted himself with such admirable | energy. Congress would soon set at
 work to remedy our circulation evil in
 a manner which would safeguard our
 prosperity"
 MT. Schiff's remarks at the Chamber | of Commerce follow:
 We have witnessed during the past
 sixty days conditions in the New York money market which are nothing less | than disgrace to any civilized count
 try. There must be a cause for such
 conditions. It cannot be the condition
 of the country itself. for wherever you
 look there is osperity-prosperity as
 we never had 1t before. It is true that
 our prosperity may be a contributory 1 condition. It cannot be that the specu- lation which prosperity always brings forward can be the sole reason for the
 conditions which "" have witnessed.
 and are still witnessing. Other coun-
 tries have had wider speculation than
 the United States.
 Speculation in Europe.
 Tn France. in Germany. in England, l speculation Is rampant and has been ! rampant at certain periods. and still
 you have never seen tho money mar
 ket for sixty days in such condition
 that rates have varied all the way from
 10 to l25 per cent.
 T say that is a disgrace to a civil | Ized community There must be cause for 1t, and WI all know the cause. The cause is in our insufficient circu-
 lating medium or the insufficient elas-
 ticity of our circulating medium Last
 year l went to the secretary Of the Treasury and said oshim. The national
 banks are gorged with their deposits.
 Take out some of those deposits and
 prevent this condition, or else money
 will seek other countries It will go l Into enterprises and undertakings out | of which if cannot be withdrawn when
 1t Is needed. Make yourself strong
 now: don't walt until the time comes
 when you must make yourself strong. The Secretary answered me anu
 any deposits now for he did not want
 to have the funds withdrawn when de-
 posits might be needed; and said he | feared the criticism of the press which is always affecting our public
 oflces. Then what happened? He left
 the larger part of his deposits in the banks until last autumn.
 The Mistakes of Shaw. |