Omaha daily bee., 1907-01-01
SHAW ON MONEY SITUATION
Secretary Of Treasury Reviews Financial
Operations Of the Year.
BIG INCREASE IN CASH ON HAND
Gain of Fifty-Nine Millions Due 10
General Activity of Trnde-Need
of Elastic Currency il
Discussed.

WASHINGTON, Dec. 8.-"There is no
occasion Tor alarm. Our only anxiety need
be lest we shall fail of facilities properly
to garner, store, transport and market our
multiplied blessings. Let every man be of
good cheer and try 70 be conservative in
everything except thankfulness."
Secretary Shaw thus concludes a resume
of the years financial record, which, he
says, has been prepared in response to
multiplied requests. In round numbers, he
places the receipts for the calendar year
1906 at $625, 600, and the expenditures at
$685. OO0,00O or an excess Of receipts over
expenditures of $59,OOOO00. AS there has
been no change in the tariff laws or the
laws relating to internal revenue, Secretary
Shaw says the large increase in receipts
is due solely to the extraordinary trade
activity.
The total expenditure however, for 1906,
as compared with 1906, he says, shows
decrease of only $5,OCO,OOO
Discussing the finances of the govern
ment for the six months of the present
fiscal year just closed, the secretary says
the books of the treasury show surplus
receipts over expenditures Of S25,OO0,Ooo as
compared with deficit of 100000 for the
corresponding months of the previous fiscal
year. The cash in the treasury is $4,000
/ 600, as compared with $l7l, 10000 a year
ago, an increase of $40, 100000 The cash
| in national bank repositories is Sl59,OOOOO,
as compared with $65, 100000 a year ago,
| an increase of s9i, O,OO0 and the total cash
/ in the general fund Is 1856, 600 OOO as against
s242,OOOOOO a year ago. Against this cash
! there are liabilities at the present time
of S13,OOOOOO greater than at the same time
last year. The available cash balance has
increased during the year &1O1.Ooo,Ooo.
Increase in Circulation.
During the last twelve months, the secre-
| tary continues, the money in actual cir
culation, exclusive Of the amount in the
treasury vaults, has increased more than
1900 600. or this increase, s145,OOOOO0 is
available for bank reserve and s6o,0o0,Ooo is
in national bank circulation.
This" he says, Seems to be a complete
answer to the oft-repeated and ill-advised
criticism that the treasury system neces-
sarily results in contraction when money is
most needed"
He maintains, therefore, that the exist
ing money stringency, worldwide in its ex-
tent, is traceable in no respect and in nc
degree to the independent treasury system
of the United States. He says the manifest
and admitted shortage has been caused by
the unprecedented prosperity in this coun.
Try anu lGeiSpldblS plOSlSllNy SNNAs "hSA q
The people of the United States, he de-
clares. consume per capita more food, more
clothes more of everything than any Other
people in the world, and when prosperous
they import very largely. This. he asserts
naturally encourages industry everywher,
and unusual business activity calls for az
unusual amount OF actual money and o.
credits based on actual money.
Elastic Currency Needed.
AS to the currency reform bill, Secretary
Shaw says that in his judgment it permits
adequate expansion, but that it's weakness
is its failure to produce contraction. Tht
volume of money. he contends, does no
respond to the volume of our business. Th'
annual increase, he adds may be sufficient
but there is no annual contraction during
!, the dull summer months. "Only the un
thinking and iIl-advised," he says, "charg
the admitted stringency solely or largel!
to stock and bond speculation"
Just now speculation in real estate is a
high tide and the opinion is expressed tha
very likely as much money is tied up II
options and margins in real estate as II
options and margins on stocks and bonds.
1T Is idle to complain OF the inevitable,
, he continues. "The spirit of speculation
among us, and, like the drink habit, thos
most addicted are frequently the loudest Il
denunciation. 1t i'll becomes the real estat
speculator TO decry every other manifesto
, ton of desire to get rich quick. Tn
epithet black banded between pot an
kettle is never instructive, and just now
is not even entertaining"
The effect of the present car shortage Of
the money market also is alluded to. TIL
secretary says: "A larger crop of cotto
than usual and an unprecedented yield o
cereals, fruits and every other agriculture
product has filled granaries and warehouse
TO overfowing and congested every impoT
tant railway A few years ago the freigh
cars Of the country averaged forty miles
day, but. owing TO the present congeste
condition and insufficient terminal faclitie
> and factory sidings, they now average onl
twenty-five miles day. This delaye
freight is owned by some one and som
, ones money is thus tied up"
Under our present system the only pos
? sible contraction during the summer an
: the only possible provision for the fall
accomplished by the secretary of the treas
ury Withdrawing government deposits froI
the banks when these funds are not needle
and restoring them to the channels of trad
as the needs of business require. By keeT
ing a taut rein, wild speculation may /
e prevented and in most instances a resultar
: crash averted.