Ottumwa tri-weekly courier. [volume] (Ottumwa, Iowa) 1903-1916, 1906-12-08
sEcRETARY OF TREASURY SEEKS
TO GET BILLS INTO clRcu.
LATIoN
SMALLER ONES WANTED
Makes Request of all Banking Institu-
lions to Search Vaults for Bills Held
In Reserve-Larser Ones VIII be
Converted,

Washington, Dec. 6.-Secretary OF
the Treasury Shaw today issued the
following open letter to all banking
institutions of the United States:
"a very marked scarcity of small
bills Is noticeable everywhere and
the treasury is powerless to relieve.
In the absence of legislation allowing
national banks to issue larger pro-
portion of their circulation in denom-
nations of five dollars, the banks
themselves must be relied upon to
alleviate the strain as far as possible.
There are in circulation nearly $15,-
100000 in silver certificates Of the de-
nomination of $40. Many of these
are doubtless packed away In the
vaults of various banking institutions
being held as reserve. Permit me
respectfully to ask that each institu-
ton, state and national, search the
money in its vaults and send these
$40 certificates to the treasury. They
will promptly convert into ones and
twos to the very great relief of the
country. 1t is the only remedy. Let
no bank complain of the conditions
until 1t has literally searched its
own vaults and contributed as far as
possible to the relief of the stu
ation."
Secretary's Report.
Washington, d. c., Dec 6.-The
burden of Secretary of the Treasury
Sfaw's annual report to congress, sub
mitted yesterday, is that the present
currency system is bad and must be
reformed.
Secretary Shaw favors an "emer.
gency currency" guaranteed by the
government, with tax so adjusted
that the notes would be withdrawn
from circulation as quickly as the
emergency had passed.
Such notes, says the secretary,
shrould be issued by the national
banks, although they would be secured
not by United States bonds deposited
with the treasury, but only by the gov
ernment's guarantee.
Features of the Plan.
"The most important feature of this
plan," says Secretary Shaw, lis the
certainty of retirement when the ex-
traordinary demand ceases It's retire
ment will be accomplished not by col
lecting in the actual notes and re-
deeming them, but by allowing the
bank issuing the same to make cor
responding deposit with the treasury
or at a sub-treasury This accom-
plishes the contraction, and the bills
themselves will soon or or later be re-
turned and charged against this de-
post. Interest on the issue will of
course cease when the deposit is made
by eliminating the words secured
by United States bonds deposited with
the treasury of the United States from
the present bank note, the additional
circulation issue need contain no dis
tfnguishing feature. The government
should accept the tax as a premium
for underwriting the issue, and should
guarantee its prompt redemption. The
people have become familiar with ma
tional bank notes and will not discredit
them, though they fail to recite the
fact that bonds have been deposited
against them.
Il deem it inappropriate, however,
to carry my recommendations to the
details of legislation. Both the plan
to be adopted and the details of the
plan must be worked out by the legis-
lative branch under such advice as it
may call to it's aid. Only on the sub
ject generally does this department
commit ITSELF"
Not Afraid of Asset Notes.
Secretary Shaw is not afraid of the
asset currency" plans which are urged
in some quarters. He even thinks as
set currency to the amount of, say,
$200,000,000 could be added to the cir
culating medium. He says:
"Much can be said in favor of credit
currency for permanent maintenance.
The addition thereof to our present
currency system has been urged for
half a century. If new currency sys-
tenn were being devised unquestionably
this plan would be included, and it
might possibly take the place of the
present bond secured circulation. No
one now, however, recommends it as
substitute. Those who favor it pro-
pose it's incorporation into, rather than
Its substitution for, our present sys-
tenn"
The United States bank scheme,