Iowa County democrat. [volume] (Mineral Point, Wis.) 1877-1938, 1908-01-09
BUSINESS MAN
HAS NO CHAMPION
HOWEVER PAlNSTAkNIG AND
CONSCIENTIOUS He MAY BE.
so SAYS SECRETARY SHAW
Panic Partially Due to indscrin1-
mate Denunciation of Capital
But All Financial Ills, Durable by
Means of An Elastic Currency, De-
cIares the Iowa Statesman.

Des Moines, Iowa, Jan. 7.-Ex-Secre-
tary of the Treasury Shaw, before the
Bankers club last evening, said that
it would be difficult to find anyone
who, during the last few years, has
had a word OF commentator for the
painstaking, cOnsci entious business
man who has built an industry, fur.
nished employment to labor, swelled
the aggregate of our commerce, or
made the transportation thereof pos
sible. 1t may be true that the good
that men do lives after them, but 1t is
certain that the good which business
men have done in the recent past and
are now doing finds no champion in
this year Of grace.
Europe, continued Mr.. Shaw, does
not appreciate to what extent this
wholesale denunciation has been in
dulged for the sole purpose of selling
newspapers and magazines, in attract
ing Chatauqua audiences, and in fur
therance of political ambitions. We
find ourselves, therefore, unwilling TO
invest a dollar in anything and I'M
able to attract a dollar of European
capital for investment. Mr.. Shaw said
he would not be understood, however,
as intimating that the panic through
which we are passing is the direct re-
suit of agitation and indiscrimminate
denunciation of capital. That is only
one Of many causes.
Some have attributed the panic to
the spirit Of speculation which the
prosperity of the last ten years has en-
couraged Of course, we would not
have had the panic but for proceed
ing period Of prosperity. No doubt
therefore, the spirit Of speculation has
been a contributing cause to 1t, but It
has not been the main cause. In proof
that the business Of the country has
been conducted conservatively, he cited
the fact that failures have been few
indeed. Merchants have been In ex-
cellent condition. factories must have
been prudently conducted, banks must
have been sound, or widespread ruin
would have marked the panic of 1907,
which is generally conceded to have
been the severest the world has ever
witnessed. Whether industrial stag
nation will become as widespread and
chronic as that which followed the
panic OF 1893 remains to be seen. He
did not think it would.
"Others place the responsibility for
what we have witnessed to defects IN
our currency system" he continued
eff our currency had been as elastic
as that of other great commercial
countries the disastrous effects would
have been very greatly reduced. No
doubt exists as to any one Of our
several forms Of money. The sole
weakness of the system is its want Of
responsiveness to the needs of COM
merce incident to seasons and trade
conditions. This weakness has been
recognized for years, and yet nothing
has been done, and nothing is likely
to be done until we shall have exper-
fenced a few more Of these dire ealam-
tiles. Why this delay? The answer
Is easy. While ninety-nine out of
every hundred recognize the defect,
not ten out of hundred can be made
to agree upon a remedy. The diver
gence of opinion among bankers and
supposed experts is more marked and
irreconcilable if possible, than among
laymen. No plan has yet been sug-
gested that is not fraught with objec-
tionable features, and the best way 70
reach a conclusion is to eliminate the
impossible and the impracticable, ana
see what remains. All our great COM
merciai competitors have large central
banks. We have experimental with
institutions of this kind, but thus far,
they have failed to satisfy the demands
of the people.
81 wonder" said the speaker 'if
anyone has considered the amount Of
capital that would be necessary to en-
able one large central bank to supply
the extraordinary needs Of 10000 COM
mercal banks, or the extraordinary
demands of commerce in As states.
The plan which to my mind presents
the fewest objections is to allow our
national banks to issue limited vol
ume of supplemental currency, sub
ject to tax of five or six per cent
during the period of its maintenance.
Those who think the government
should insure deposits can find no OBJ
lection to a guarantee redemption,
for a bank note is almost identical
with a cert fcate of deposit payable
to bearer on demand. and it would
never be parted with or paid ont by
1he back except in exchange for some
thing believed to be equally good
Such supplemental currency would
spring into existence where needed
aud when needed, and it would be
promptly retired by a deposit OF
like amount of any form of currency,
with a sub-treasury, whenever the rate
of interest became normal and the
demand therefor ceased. In other
words, it would be elastic, for it would
contract as well as expand.
rHADn N=kTTnM