Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1906-12-07
Secretary Shaw's Currency Plan.

doubtless have outside interests. They
would be responsible to no admins
tration, to no political party, and each
could shift the responsibility from him
self to the board as an aggregation. 1t
is doubtful whether such an institution
could be managed less selfishly and
more in the interest of the people gem
orally than the treasury department
has been conducted even under the
most unfortunate management to
which 1t has ever been subjected. The
treasury has always been the bloody
angle of criticism of ar administration,
but no critic has ever charged the head
of this department with cupidity or
with operations having selfish ends III
view.
Cooperation.
IF some method could be devised by
which the national banks of the coun-
try could be made to cooperate the
major portion of legitimate criticism
to which our present system is now
subjected would soon vanish. That the
banks do not now cooperate in the
slightest degree is self-eyident. New
York City, for instance, has the only
call money market in the world, but SO
impossible is it TO secure cooperation
between the financial institutions Of
that great city that the current rate on
call money. as l have already shown,
on the morning of a certain day was
IL per cent. with some loans as high as
ia per cent, while in the afternoon it
dropped to 5M per cent During part
of the previous season millions were
OF 4
and later in the season the rate touch-
ed 100 per cent. 1t must be manifest to
laymen even, as we'll as to financiers,
that such want Of corporation, result
ing in such fluctuation in interest
rates, offers little encouragement to the
hope that international balances in the
near future will be kept in this coun-
try. do not criticise banks for failing
to cooperate, for have been repeat
eddy assured that corporation is inn
possible.
Another indication of the want Of
cooperation, not only in New York
City, but quite as much turnout the
country generally, is discoverable in
reserves. Admittedly, conditions have
been no worse in New York than else
where, tho the weekly statement re-
veals conditions only in that city. Re-
peatedly within the last five years sur
plus reserves have been practically ex-
hausted in midsummer, and sometimes
the aggregate surplus reserve of the
associated banks in New York City has
only equalled that reported by a single
institution. / must not be understood
as expressing an opinion that this con-
dition indicates any want Of conser-
vatism, but l do know that II there
were the slightest measure of cooper
alton between the national banks of the
country very large reserve would be
gathered in midsummer to provide for
increased business incident to the crop
moving season and the revival of COM
mercial activity annually witnessed
during the autumn and winter months.
Whether cooperation can be secur-
ed by statute is question on which
students of the situation will Of course
differ / suggest for the consideration
of congress two possible plans: First.
a graduated reserve, determined by
statute. The objection to this plan is
that conditions vary with different sea-
sons. Sometimes the crisis is deferred
and occasionally the most stringent
season is during the spring. Second,
a better plan, in my judgment, would
be to clotlle the secretary of the treas
ury with authority to require all banks.
at certain times fixed by him, to slight
ly and gradually increase their reseryes
and hold the same within their own
vaults with corresponding authority to
release the same from time co time d
In his judgment will best serve the
business interests of the country"