The Washington herald., 1907-11-19
TUESDAY. NOVEMBER 10. 1907.
Effective Treasury Action

The President and Secretary Cortelyou
have entered the financial situation at
the psychological moment We believe
that their decision TO issue $3.50, 900 900 in
government securities. or so much thereof
as may be necessary, Will mark turn
ing point IN the restoration Of public con-
hdence. and contribute nightly 10 the
dissipation OF those senseless fears that
have reduced the currency to immobiIity.
AS we said the other day. symptoms OF
Improvement are manifest everywhere
Only the strong arm Of the government.
in which all have faith, was needed TO
give slowly returning confidence a boost
and re-establish the normal flow Of money
and credit. That necessary impetus has
been given by the action taken by Secre-
tary Cortelyou
The nature OF the measures adopted
IS so unusual-unusual. that is 10 say.
for the attainment OF the ends aimed at
as TO invite comment on the unscientific
character OF a currency system which
compels the government TO borrow money
IN order 70 increase the amount OF cash
available for ordinary business trans
actions Criticism OF these measures
would be prolific at any other time, and
doubtless viii be heard now. especially
from those who oppose the issue OF in
terest-bearing securities as a substitute
for money; but such criticism. in view
OF the emergency confronting the country
and the administration, would be un-
timely, and would better be reserved
Tor some calmer period in our national
finances. The government Of course. is
not a borrower from any necessity aris-
ing out OF its own operations. It's rev.
enues are superabundant and its surplus
funds are on deposit in scores of banks
from Maine to California. Why borrow
under these circumstances? Because. in
the first place. government deposits. ow-
ing TO the existing stringency, are vir-
tually tied up. and in the next place. the
only way to enlarge the volume Of the
currency is to increase the bond security
which is the basis Of bank-note issues.
The Panama Canal bonds will afford a
basis for an equivalent amount of bank
notes, and the emergency certificates will
release an equivalent proportion Of the
impounded government deposits. In a
sense, the new issues will be a form of
currency, and they VIII have practically
the same effect as an addition to the SUD-
ply Of currency.
To the timely action of the Treas
ury Mr.. Roosevelt adds some reassurIng
words, which, it may be hoped. Will
brace up the timid 10 90 ahead with
normal business in normal fashion; for.
as he shows. there was never less reason
for money fright than now. The ma
tons wealth in production is enormous
It's great manufacturing enterprises
sound, its mercantile and financial insti-
tuuons solvent, its Treasury impreg-
nable, its metal and paper currency IN
questioned. These incontrovertible facts
afford solid foundation for hopefulness
as TO the future
Even more reassuring than his portrayal
Of our material strength is the Presidents
statement that the leaders of Congress
are considering a currency bill which
viii meet in permanent fashion the moods
OF the situation" That il is within the
power Of Congress to provide means for
meeting such monetary crises as we are
now passing through without resortinp
10 the abnormal and costly measures tho
Treasury has been compelled TO adopt
is the opinion of all competent fnanciers
and the time has come for legislation.
not Of the panic sort, which Secretary
Cortelyou has warned against. but along
the safe and conservative lines laid down
by the bankers of the country. Mr.
Roosevelt. we feel sure. will insist this
time that Congress perform its plain duty
in this regard.