New-York tribune., 1906-12-12
FOR CURRENCY REFORM
Jacob II. Schif Says One Man
Reguldtion Is Poor Finance.

rps,caxo. Dec 1.-THE reasons for the present
state of the money market and remedies Tor ~
were explained 20 the Illinois Manufacturers AS
sociation at its annual dinner here tonight by ia
cob IL Schih the New York banker. Mr.. Schir
Was the guest OF honor. His subject was Cur
rency and Other Reforms" and the speaker de-
clared that ''The overnight announcements OF re-
lief that the Secretary OF the Treasury Is in the
habit OF making neither 5000 hhahce nor iFui'
ful OF good results
The announcements from Washington according
70 Mr. Schif are the consequence or undesiTaole
methods for whicn existing laws responsible.
The remedy the speaker said, is legislation which
= viii provjde that the revenues OF the government
. shall on collection. be deposited with national
banks proportion TO their capital, tIe banks 10
furnish security acceptable the Secretary al the
Treasury and pay uniform rate of interest as de-
terrnined by that official Should such legislation
be adopted Mr.. Schif c0ntended, the country
would no longer be dependent upon single man
and mind for the regulation OF the money supply.
MIR. Schin spoke in pat follows:
- There is nothing intricate in the banInote prob
lem. Let take your own case: You are manu-
facturers; you have certain capital when IS IN
vested IN your plants and you also haze TO Ereter
or lesser extent certain amount o WoThlnG @ 90 80
quenty need additional capital, which you nave 20 20
borrow temporarily; for payment aiter you you nA,e
your banker, who is willing TO accommodate YOU;
dealers 10 whom he must lend, and for this his
actual resources do not suffice He deals. how
VIII say 10 you. ought 10 be in position TO say
70 you: Il cannot give you actual money, gold or
part from il. I have already loaned ont, but what
srerywhere cry as money. Because 1t is known that
they viii bs redeemed by me upon representation,
AS this serves your purpose. YOU accept a loan Of
The bankers notes. and after you have marketed
In furn with the money received from YOU with
draws his own circulating notes and cancels them
diVest the problem OF the economic principles
20 be carefully looked after 10 make nanknote cir
culation safe beyond any peIaoVenture. Ne have
the simple and straight path. have resorted 70
every kind Of makeshift and heresy. and arc call
the non-interest bearing obligations Of the govern
1onz after tbS necessity for So nlIIstinabIe "a cir
cuiating medium had passed We enlarged upon
this. under the stress Of the Civil War, by per
rnittng the banks 70 buy The bonds Of the govern
circulating medium in its character Of advantage
% no one except 10 t9e SoFelilnent winch does not
obtain loans al rates Of interest not commensurate
with the real value Of money, and TO The banks
cuiation.
Speaking OF the propositions embraced in the
cent report Of a special committee Of the New
York Chamber Of Commerce as a remedy for ex-
tsting conditions Mr.. SchiT said:
This proposition in some. essential details ap,
reoentlv publjsbed Irn5eT n New ~ YoTl raI we
shall obtain circulating medium which because
- & me gIaeuatea Tax upon circulation Il em6odes
Essnkers Association plan viii be found wanting
en- Epet u bY US uRe m 6 6gTs sy Ge5r 1pR 6 t@
10 secure funds al cost Of about 5l2 per cent in
cuiating notes at fixed Of 2l2 per cent. which
plus The expense to maintain reserve as proposed
total interest cost about 32 per cent YOU viii have
which fear, win prove more rigid and irrespon-
s fSe T6s6 11n 9y'g III We 19W haye Sosy through
too low IN its minimum and rapidly advancing upon
notes can We obtain tie elasticity which is needed
y Is most regrettaale that the Bankers Associa
Commerce's proposition before f. rejected the very
wise provision for a graduated tax; it proves only
once more that We shall never succeed in obtain-
s pIeuTa5se % c4ITe4Sy REFORM unlil the hanks
Rrudge them legitimate, reasonable profit. cur
will be certain 10 meet in a sound manner the IL Ta
& 9Grements o. the material Interests Of the coun:
most fatal defect in the Bankers Associatio8 psT
there IS much 70 recommend Il, though personally
hold strongly 70 The opinion that It Will prove
hanks or more with the privilege TO issue inde-
complet he eafsgar6a nav a6ear % rro1@gad 9o% ~
be thrown around the exercise Of the privilege.
the two banks of the I-Tita5 sta-es @ % Sg,5S ye n II
The mind OF the peoue. not an attainable rroiect
sks1itsi he concentration Of large
certain L. produce, las increased and dimin-
Ierae n.IT 30 .ler yaiuaple priYi-
Fuers 10 a central institution
Speaking of the withdrawal Of funds into tho
Tinted States Treasury. and the 'so-called as
sistance TO the money market by the Secretary os
the Treasury, which rhis .ssitates" Mr schiff
said:
Ihe oLerngnt announceIneuts % relief the Sec
reiaTy or the Treasury Is In habit of making are
nelther good finance nor fruitful Of good results
70 me material interests of Ire
SUDDEN Improvements from Washington. 10 which
= " nave becoIle accustomed, are only the conse-
quence Of most undesirable. almost barbarous
Inethods, which existing laws have called forth.
.e sole hLt imperative remedy for this is the en-
aetIneit OF legislation providing that the revenues
on Lle government, which after all nothing
tiut part of the working cauital Of The courtr1S
EsL as fast as they collected deposited with
3 VIC hauohal banks IN proper proportion to their
,bi an,.a[ 4po4 sGch actual security may be ac-
cptaple 10 me Secretary Of the Treasury and uron
the payment OF a uniform rate OF interest like
wise TO be determined by The Secretary, 49, ~
After advancing many reasons for such a system
b. DIT. schin turned 10 the subject of credit cur
rency. and said:
Since / am 10 some extent responsib for tho
present agitation Tor currency reform, feel I'd The
more as duty 10 warn against anything in the