The San Francisco call., 1896-08-12
The Local United States Sub
Treasury Will No Longer
Cash Them.
NO BETTER THAN EXCHANGE
Sudden Revu1sion in the Local Money
Market Segregating the
Currency.

The local money market is in period OF
transition; discounts are being charged
where before the paper was always at par
and national bank notes have been low
cred from a position almost as high as
gold itself tc one of mere exchange.
This sudden revulsion is due TO the
action of Assistant United States Treas
urer Berry and his action is due to local
financial conditions and possibilities.
In Novem Der, 1894, the Treasury Depart
ment issued several rules to the assistant
treasurers, among them being one to this
effect: National bank notes are redeem
able in lawful money of the United States
by the treasurer, but not by assistant
treasurers." This rule was sent to the
local sub easury, but it had always been
the custom here to receive any kind of
money and pay TOR it in any kind desired.
Silver certificates were redeemable in
silver in gold or in currency and the
same with notes and standard dollars. All
money was the same at the local office ana
good for its value in any other. This
custom was continued after the rule was
received and after a time the San Fran
cisco sub-treasury stood alone as the only
one in the United States where there was
no Discrimination.
Under that system bank could take all
national bank notes deposited and have
them redeemed at face value at the SUBJ
treasury. 1t could get gold for silver or
silver certificates, as well as silver for
gold. But now conditions have changed.
To have their national bank notes re-
deemed the banks must send them East.
For standard silver dollars they can get
silver certificates, but not gold-for silver
certificates they will be given only silver.
Since the rules of November, 1894, were
received. Mr.. Berry mas more than once
written to the Treasury Department tor
instructions. The rules were clear, but
they had been ignored in the administra-
ton of the local Office, and while the dis
regard OF the rules was known to the de-
partment, still the assistant treasurer de-
sired definite instructions as to the course
he would take. No answer was received,
and within the past month he wrote again.
There was still no answer, and SO, as he
says, he decided, In view of the peculiar
financial conditions now existing, to run
his Office within strict construction of all
the rules of the department.
Last Friday the Nevada Bank sent 5000
in national bank notes to the sub-treasury
for redemption in gold. They were re-
fused, and the bank had on its hands q
pile of notes redeemable only in the Wash
ington treasury. To redeem them meant
all the elements of a transaction in ex-
change, and so when more notes are de-
posted the price OF exchange. or a discount
similar TO it, is charged. National bank
notes, except those issued by the local
national banks, are not at par value here
any longer.
Another rule, also in the circular of No
vember, 1894. and heretofore disregarded.
has been suddenly enforced at the sub
treasury. 1t reads: "Silver certificates
are redeemable in standard silver dollars
only, or exchangeable for other silver GER
tificates.' Here again an old source of
gold supply has been cut of, and the
banks are corresponoingly depressed.
81 did not want to carry on this Office
except under the strict rule of the treas
ury," SAID the assistant treasurer yester-
day. Things are SO uncertain now that
did not want to give any cause for criti-
cism while this money agitation is going
on. Besides, we must have gold enough
TO redeem such currency as is properly
redeemabIe in gold, and so l have decided
to apply those old rules, and to treat notes
and silver certificates as the rules direct"
This action at the sub-treasurv means
that from now On gold will be gold and
silver only silver out here in the West
Already the apprehension over possible
silver policy being established is having it's
effect. and silver must flock by itself until
its position in the financial world has be-
come more than guess.