The Washington herald., 1906-12-13
Mr. shaw and the Moner Market.

Mr.. Shaw and the Money Market.
Secretary Shaw has again come TO the
relief of the money market by depositing
public funds with national banks. His &c
tion serves as a fresh reminder Of the
great influence the Secretary OF the Treas
ury now wields in Wall street. 1t should
also focus attention upon the extraordi-
nary recommendations of Mr.. Shaw's an
nual report. which look to a perpetuation
Of his methods and TO still further in
crease of the Secretary's control over the
money supply and the rate of interest.
As President Roosevelt has expressed his
profound appreciation" of what Mr..
Shaw has done. the Secretary's official
acts have apparently the cordial indorse-
ment OF the Executive
Give me slOO, coo TO deposit with the
national banks or withdraw from deposit
as I like" says Secretary Shaw in effect,
'and give me power 10 contract the na-
tional bank circulation at pleasure, and
viii guarantee TO prevent financial panic
either in this country or in Europe. No
pent-up Wall street confines his powers
He would as soon help out the distressed
f1nanciers Of London or the continental
bOurses as those Of his own country. We
cannot afford to disturb financial condi-
tions in Europe. he says. and 10 prevent
such disturbance he would not hesitate
TO make deposits in national banks on
condition that the banks In turn promptly
deposit an equal amount abroad" No
central or government bank in the world. 20
the Secretary asserts, can so readily in
huence financial conditions throughout the
world as can the Secretary of the Treas
ury under the authority with which he is
now clothed" No wonder the London
fnanciers regard Mr.. Shaw as a financial
wizard
The possession Of this immense power
does not stagger Mr. Shaw. In fact, he
desires its augmentation. He is sure that
in his own hands its exercise would be
perfectly safe, and he is equally certain
that il would not be abused by any of his
successors. I have well-nigh unlimited
discretion in quarantining against yellow
fever" observes Mr.. Shaw. in substance,
clinching the argument The American
people hold me responsible for financial
conditions. I ought TO have the discretion
and authority 10 fulfill this expectation.
Cannot be trusted as f1nancier as well
as in the capacity Of health officer?"
We shall not take issue with this re-
markable train OF reasoning. II is quite
possible that the American people may
prefer control Of the money markets by a
Secretary of the Treasury 10 control by
powerful interests" in Wall street or
elsewhere; it may be. as Mr. Shaw thinks
that great power. centered in a single Of
fetal, held to strict accountability for his
acts, all Of which must be performed in
the open. will be exercised with a full
sense Of public responsibility and with an
eve single TO the interests Of the whole
body of the people: and it may be, also,
that in the present chaotic condition OF
our financial system no other course was
open to the Secretary Of the Treasury
than to face the heavy responsibility he
thought was mis- and to pursue the course
he adopted in response TO the urgent so
Ecitations of the banking and business
community. a course which in the main
produced beneficial results at times Of ex-
treme financial tension.
But what shall we say Of the failure OF
Congress to so reform our currency sys-
TEN as to avert the dangers against which
the Secretary of the Treasury must stand
guard by the exercise OF the great power
Of his Office? We hear mHch from the
Capitol of executive encroachment upon
legislative prerogative, and Of the Usurpa-
ton of power by the executive branch,
but does not Congressional inertia contrib
ute largely to the increment Of executive
functions? The country cannot stand still
Emergencies arise which must be prompt
" met We have an Executive who be-
lieves in meeting them promptly and in
stretching his authority as far as IL will
go in providing remedies for economic
and financial ills-remedies which Con-
gress has notoriously failed 10 provide
Where. then, does the fault lie if the Sec
retary of the Treasury has become a YER
liable Colossus in the financial world,
welding a power felt in every financial
mart of the new world and the old and
carrying with it tremendous possibilities
of which Mr. Havemeyer. of the Sugar
machinery Of national and international
credit?