Evening star., 1896-11-09
Treasury Resources Taxed to Meet
the Demand for Paper Notes. :,
LARGEDENOMINATIONS N0TPLENTIFUL
Secretary car|is|e's Policy of Retir-
ing the Sherman Notes.
LEGISLATION NEE D. E D

gold and get the paper money to pay for 1t.
The resources of the treasury are being
Severely taxed to meet the demands for
paper notes of all denominations, which
the holders of gold are eager to obtain in
exchange for the more bulky yellow metal.
The kilograms of distress which reached
Treasurer Morgan during the critical hours
of January and February, 1898, and again
during the heavy gold losses last summer,
are now turned into plea for greenbacks
Sherman notes and silver certificates In
stead of for gold coin. Reports reach the
treasury from various directions that mer-
chants are paying gold across their coun-
ters to their employees or in change for
large bills. The scramble for gold which
formed so frequent theme Of Mr.. Bryan's
lamentations, has ceased as suddenly as 1t
arose, and the flow of the metal into the
markets of the country recalls the famous
outpouring of gold and silver in France
when the legal tender quality was taken
away from the masses of deprecated paper
asSignats Assistant Treasurer ONeil at
Boston is being supplied as rapidly as pos
sible with large notes to pay for the gold
deposits which are offered him by the lead
ing bankers. The gold reserve, which was
officially stated at $114,3o1. los Thursday.
had climbed this morning close to $l20,O0O.-
wv, and the reports received by telegraph
represented only a part Of the big influx
Saturday were Sis, :jj:; ,5S6. but this did not
include $9l5O01 deposited in the New York
subtreasury Friday, nor deposits of $2oo,OoO
at San Francisco and $l15UOO at Boston.
These amounts definitely reported are be-
lieved to be only fraction of the amounts
which are already awaiting examination
or which will be covered into the treasury
as soon as they can be handled.
Scarcity of Large Denomination Notes
Assistant Treasurer Jordan at New
York will be compelled to adhere for the
present to his rule of paying greenbacks
for gold only upon transfer orders.
These orders come from the south
west, and usually request the payment of
paper notes at New Orleans or some other
central point in return for the delivery of
gold at the New York subtreasury by the
reserve agent of the bank desiring the
notes. The usual request at present is for
United States notes of large denomna
tons, but many of those who offer gold
express a willingness to take small notes
rather than to be delayed in getting rid of
their gold. The demand still centers upon
United States notes rather than upon silver
certificates, because these notes are avail
able for bank reserves and can also be
exchanged for United States currency GER
tihcates. A bank desiring to put into the
ost compact form its cash reserve is able
10 exchange gold for greenbacks without
regard to denomination. and may then de-
pCsit the greenbacks in the subtreasury in
exchange for currency certificates. whose
denominations are not below five thousand
dollars. The treasury is not very well
equipped with legal tender notes of large
denominations because of the requirement
which has been foisted into the appropria-
tfon bill for several years past that the
money appropriated for the bureau Of en-
craving aid printing shall not be used for
converting notes of small denominations
into larger ones of equal gross value The
whole amount Of notes for 81 900 in exist
October tir in, init
ed States notes. 81, 1S0.O0J in Sherman notes
and twenty-eight thousand dollars in ma
tional bank notes. Most of these large
notes. however, are already in bank re-
serves or in the hands of the public. The
treasury. with its legal tender holdings of
$J4 .SS3 1S5 in United States notes, and $39,-
ooS.114 in Sherman notes. holds mainly
notes of five and ten dollars which are not
very eagerly desired by the banks
1t Is possible that an arrangement will
be made to turn some of these into larger
denominations, If the pressure for such
notes continues. The present movement IN
surrender gold for currency, however, sim
ply indicates desire to change the char
acter Of bank reserves and to be prepared
for large transactions. An active revival
of business would increase the demand for
small notes and might make the present
supply desirable. There is no difficulty in
printing notes through the present facil-
ities Of the bureau of engraving and print
ing. The trouble simply relates to the
margins outstanding, which are likely to be
materially reduced as the gold reserve in
creases. The banks are subjected to criti-
cism in some quarters for not accepting
silver certificates instead of legal tender
notes. upon the ground that they would
thereby testify their confidence in all the
money of the country. Silver certificates
are not available for bank reserves and the
treasury officials are very well content
that they are not called for, in view of the
fact that the margin of free silver in the
treasury against which they might be is
sued is only $12.627,179.
Secretary Cnrlisle's Policy.
The policy pursued at the treasury up to
the present time has been the payment of
United States notes in preference to Sher-
man notes, although the banks show no
unwilingness to receive the latter Secre-
tary Carlisle has not yet abandoned his
policy of retiring and locking up Sherman
notes In order to reduce the pressure upon
the gold reserve at subtreasures outside
OF New York and San Francisco. 1t is only
at the latter points that United States notes
are redeemable, while the Sherman notes
are redeeemable at all subtreasuries The
volume OF sherman notes originally issued
was s155,931,G ,G02. The policy Of retiring
them when redeemed in standard silver
dollars has wiped out of existence $33 O79-
IL. leaving the amount in the hands of the
public, the banks and the treasury at S121
s51 $50.
The more recent policy of boarding these
notes in the treasury has locked up nearly
lo.o00W 900 and reduced the amount ac.-
ually in the hands of the banks and the
public to SS3G0O,O00. TIE question now
pressing for settlement at the treasury is
whether these locked-rp notes shall be paid
out for gold. 1t is probable that they will
be paid out after the bulk of The United
States notes have been got rid Of The
present pressure for currency and the offer
irgs of gold make it highly improbab bic
that the Sherman notes will return to
plague the treasury by the demand for
geld redemption in the near future They
can be boarded again as they drift into the
treasury in current receipts, and they can
be cancelled and retired when presented for
redemption in standard silver dollars
These redemptions have reached nearly
$2l,OOO,OOO within the past fifteen months.
ard 1t would require only a few years to
wipe out the whole outstanding volume by
the continuance of this process.
Legislative Treatment Needed.
The partial settlement of the problem Of
the gold reserve by the influx of $4,000, 900
from Europe, large part of which is
reaching the treasury, enables Mai. Nc
kinley to enter upon his administration
without the embarrassment which he would
have faced If the gold reserve had been
dwindling and a new issue of bonds had
seemed to be required. Some of the more
far-sighted Of the treasury officials do not
believe, however, that the problem can be
left where 1t is without further legislative