Evening star., 1896-03-23
TREASURY FINANCES
How to Relieve the stringency in
the Western Money Market.
EFFECT OF TIE RECENT BOND SALES
What 1t is Hoped in Regard to the
Gold Reserve.
NATIONAL BANK CIRCULATION

NATIONAL BANK CIRCULATION
An in portant step to relieve the growing
stringency in the money market in the
west has been decided upon at he Treasury
Department Reports from western banks
have indicated that rates for money were
climbing upward, and that the banks. in
some cases, were paying Z and per cent
for loans between themselves. Radical ac-
tion Is not contemplated at present. In or
der to ease the money market, but the
western banks will be allowed to hold a
little larger per centage in money OF the
bonds which they intrust to the treasury to
secure public deposits than they have here
tcfore been allowed. These deposits, at the
close Of last week, were $15.O2l .666, ex-
elusive of the special deposits on account
of the recent bond sale. The par yalue Of
the bonds held is probably about $l6t O0O. .OD.
and there is no intention at present to per-
init a sufficient increase In deposits to re-
quire an increase in bonds. The policy was
adopted about year ago of calling in III
Per cent of these deposits with the banks,
in order to contract the redundant cfrcula-
ticn, and this 10 per cent will now be re-
StOTcu Inc money is HOI III ally Case
II transferred from the treasury to the banks,
but IS covered into the banks by Internal
revenue collectors and other public officers
for the convenience Of the service. and the
change of policy simply contemplates the
accumulation of these funds to a slightly
larger amount before they are called Into
the treasury.
Effects of the Recent Bond Sales.
The reply to the resolution of Senator Hill,
calling for all the facts and figures regard
ing the recent bond sale, has been prac-
tically completed at the Treasury Depart
ment, and will probably be sent to the Sem
ate this week. The letter of Secretary Car
Isle will not it Is understood, discuss the
economic aspects of the bond issue, but the
treasury officials believe that the naked
figures presented will Of themselves constf-
tute n powerful argument In favor Of the
decision of the President and Secretary Car
lisle to issue a popular loan for the pro-
lection Of the gold reserve. The effect of
the new loan thus far, in removing the re-
dundancy of circulation and raising interest
rates in New York and the country, with the
result Of arresting gold exports and main
tanning favorable rate of foreign ex-
change, is causing great satisfaction at the
Treasury Department. The net imports of
gold during February were $9375,3 3s9. more
than twice the net imports during February,
1893. under the operation of the contract
with the Morgan syndicate. The only fea-
ture OF the reply to Senator Hill which
might be construed unfavorably to the re-
suits Of the popular loan is the statement
of Withdrawals of gold from the treasury
during the past two and half months. The
aggregate Of these Withdrawals, from Janu-
ary g. when Secretary Carlis1e's circular in
viting bids became public, to the close of
business on March 10, was NO,97j, ,547.
These Withdrawals have been carefully an
alyzed at the Treasury Department, with
the help of Assistant Treasurer Jordan OF
New York. and it appears that s1O,O65, 173
have been for and Fl Az hav
been in gold bars for the use Of jewelers.
This leaves SO. 473,3 327 withdrawn in gold
coin for other purposes than export, pre-
sumably to make payments for the bonds.
The Gold Reserve.
The total proceeds of the bonds up to the
close of last week were s1O3, ,6O1, ,1Os OF
which S93, ,1O4.s0O has been paid in on ac-
count of principal. SO, 500, Al on account of
premium and $135,S3 for accrued interest.
The total proceeds. when all installments
have been paid, will be about $111 90, ,OOO
SO that about $7.J00,OOO remains to be paid
into the treasury. The deposits made in
national banks were originally $50, 1856 455,
hut they have been reduced by the transfer
of funds to the amount of $1O,9Sl, 43S to tie
treasury, until the net amount now held is
$1D, 4o2, OH. The proportion Of this amount,
which is in gold, 1888, TAT, has been car
ried for some time as a part of the gold re-
serve, but the remainder, $13. .O6S 27O, is held
by the banks in currency, and appears in
the treasury statements as a part of the
usual deposit accounts. The official reserve
which Low stands at about $12S, S,OOO, 900, will
rise to about $135, 100000, If losses continue
small and all remaining installments are
paid in gold obtained from outside the
treasury. Hardly so favorable a result as
this is looked for by treasury officials, but
1t is hoped that. owing to the contraction
of the volume of currency and the demand
for money, the reserve may be kept intact
for several weeks in the nefghborhood OF
no coll mo- 10
upon the national banks holding deposits
for about one-ffth of the special deposits
on account Of the bond issue will be re-
peated from week to week. unless the
money market becomes dangerously strin.
gent. The Secretary Of the Treasury has
some degree of control, while these Sly,-
A2,O11 in deposits remain outside the
treasury, over the volume of circulation
and the rates of interest.
National Bank Note Circulation.
The national bank note circulation has
not yet disclosed fully the effects of the
new bond issue, but it is claimed at the
treasury that there are indications that it
will rise by the end Of April to about s225,-
100000. representing an Increase of about
100000 over the figures before the call
was issued for bids for the new bonds
The orders for currency during January
were $1O,3IO, $50, during February, s.. 5I3.-
600. and during the first three weeks Of
March. 81. 100000. These orders of more
than $17,OOO,OOO have only been partly filled.
but the circulation has already risen above
$21S.OOO,OOO, as compared with $213, 1000 600
on January 81. 1t requires some time to
complete the printing of the notes and
thus far only $5.y17,65 of the new bonds
nave been deposited during February and
$2.A1. 800 during the first half of March,
No notes are issued until the bonds are
received, while in some cases the bonds are
received several weeks before the nots
can be printed. Many banks ordered new
rotes before the bonds were allotted and
failed to obtain bonds in the allotment.
1t was feared that some of these banks
would cancel their orders for new circula-
tion, but most of them appear to have been
purchasing bonds in the open market. and
have written to Controller Eckels that thew
will. within short time, deposit the bonds
to cover the notes which they have or
dered. The net increase in circulation
will not quite equal the new orders, because
of the retirement of notes for which lawfuI
money has been deposited with the United
States treasurer.
Gold Coinage.
The coinage of gold will not be greatly in
creased by the proceeds OF the bond sale, as
most of the gold paid for the bonds, even
that, returned from Europe, has been in
United States gold coin. The government