Evening star. [volume] (Washington, D.C.) 1854-1972, 1900-03-19
SUCCESS Is ASSURED
Treasury View of the Refunding
Plan of the Recent Currency Act.
MANY APPLICATIONS FOR new BONDS
Large Increase in Bank Note Cir
cuIation Not Expected.
ST RENDER or nED0STTC
SURRENDER OF DEPOSITS

The success Of the refunding plan en-
bodied in the gold standard law is regarded
at the treasury as assured The applica-
tions for the refunding of old bonds up to
the close of business on Saturday reached
a total of S50,6i9. $50. Nearly all of these
come from national banks, which will get
the benefit of a reduced tax on circulation
when circulation is based upon the new
bonds. The completed cases where the
papers are in regular form amount to s24,-
3U,St0, and of these only s2,1J0,1SO are
bonds belonging to individuals and cor
porations other than national banks.
Treasurer Roberts has already mailed
checks for 81, 424 for premiums on private
cases numbering sixteen and representing
bonds of the face value of $500, 100.
Demand for New Bank Notes.
Controller Dawes and his force are work.
ing at high pressure to meet the demands
class of bonds in place of another to Sc
cure circulation. The national bank notes
issued for six days of last week were S.
641 go and those destroyed were only ST.
1890 The net result was to increase the
circulation on Saturday to s257 ,O9S 6S7. This
is an increase of s1OOC0,OOO since January
81 and S,JOOOO since February 81 A
considerable part of the increase in circu-
lation is due to the orders which are pour
ing upon the treasury for circulation to par
OF bonds already pledged as the basis of
circulation. The sum of s., 03O6O in new
bank notes was shipped by the controller
on Saturday, of which all but 500 200 was
from banks raising circulation to par. The
circulation secured by bonds now stands
at $219,211, 112. and that secured by de-
posits of lawful money and in process of
retirement at $37 .SS69T5. The various
transfers of bonds by the banks, with with
drawals In some cases to take advantage
of market prices, have had the effect of
anticipating the legal limit of 100000 per
month for the withdrawal of circulation.
The March account has been filled and the
April account has been overdrawn to the
amount of 81, 100, 100. The bonds cannot be
withdrawn by the banks any faster than
the law permits the retirement Of the cir
culation.
Controller Dawes intends to scrutinize
carefully all the applications for new bank
charters. whether they come from banks
already in existence under state laws or
from new applicants for charters. He has
instructed the national bank examiners
throughout the United States that he will
require them in all cases to report upon
the character and standing of the appli-
cants for charters.
Increase in Bank Notes.
1t is not believed by the treasury officials.
in spite of the slight furry which is TAX
ing place among the banks. that any large
increase of bank note circulation will occur
as the result of the refunding operations.
An increase OF about 100000 will take
place through the authority given the
banks to raise circulation to par of their
bond deposits. Bonds cannot be obtained
beyond this except by purchases in the
open market or by the surrender of de-
posits of public money. The present prices
of bonds. both the old classes and the new
twos. are not such as to encourage large
purchases nv the hanks in the ma ket r-it
the expectation Of profit on circulation.
Such changes as have occurred in thu de-
posits of bonds in the treasury have con-
sisted to a large extent of substitutions of
one class of bonds for another and the de.
post of old bonds in order to take imme-
date advantage Of the rafunding PROPOSE
ton. The latter deposits have not been
large enough as yet to justify the expccta-
ton of great increase in the circulation
The total bonds pledged to secure circula-
ton stood on January 81 at S235, sc, 10.
The amount Saturday last was s245, 21O O7O,
or an increase of less than $4,000 600
There was little reason why banks pro-
posing to increase their circulation under
the new plan should not have purchased
bonds of the old classes and deposited them
in the treasury in anticipation of refunding.
The fact that less than $4,000. 600 in bonds
have been SO deposited does not indicate
that further large sums will be deposited.
The bonds which are not covered by the
refunding law have been reduced as the
the law have been increased. The most
striking increase is in the 5 per cent bonds.
where the amount pledged increased from
S16.636. 100 on January 81 to s23.175.s50 on
March II. The new fours pledged for Gil
culation fell during the same period from
$1i, 9i1, 80 to S14,06GS50.
Treasury Balance.
The treasury cash balance has gone up by
leaps and bounds during the present calendar
year. Beginning at $133 .595, 453 on January
=, following the present form of statement,
the balance rose to s142 400, 973 on February
l, S14s. 1862, SOB on March /, and finally to
S157, I92. 993 Saturday last. The excess
of customs and Internal revenue receipts
over ordinary expenditures is the explana-
ton of this great increase in treasury re-
sources. This surplus will b. employed to
pay the differences between face value and
present worth on the bonds refunded until
the cash balance begins to show signs of
depletion. Secretary Gage will then call
upon the banks to surrender their deposits
of public money in lots of 5 per cent at a
time upon notice of ten days. 1t is doubt
full If any of these notices are required and
one or two will probably be sufficient in
any case.
No Call for Deposits.
The absence of necessity for calling upon
the national banks to surrender their hold
ings of public money will have a direct eff
feet on the increase Of bank note circula-
ton Calls upon the banks for $40. 600, coo
of their deposits would have released about
that amount of the bonds pledged for their
security. The banks might then have trans
ferred these bonds to the circulation ac-
count and added about $50 600 900 to the
bank notes afioat This will not occur under
present conditions The banks might sur
render deposits voluntarily and use the
bonds for new circulation. and from some
points OF view this would be an advantage
The fact that the deposits involve less ma
chinery and do not require the maintenance
of a redemption fund Offset some of the adj
vantages of the national bank notes in
other respects. The fact that circula lion
cannot be reduced by the banks at will, be-