Evening star. [volume] (Washington, D.C.) 1854-1972, 1900-09-24
Pressure for Currency Beginning to
Be- Felt.
LARGE INCREASE IN CIRCULATION
1t Has Amounted 3 to at Least
$1oo,ooQ,ooor Net.
REFUNDING THE BONDS

L
the crops is beginning to be felt. in spite
of the liberal disbursements of the treas
ury and the large increase of circulation
| under the refunding law
The issues of gold certificates by the
treasury at various points in the south and
| west, In exchange for deposits of gold In
| the New York subtreasury by banks on
| behalf of their country correspondents are
| already 81, 000,0 more than at the same
| time last year. These exchanges have
| reached Si,9 900, of which ali but $780, 900
| has been In September. New Orleans has
taken So, 195, 600 in the new gold certificates
| st. Louis $750O00 and Chicago 100000
| These are not the only exchanges being
made in New York and Washington, in
order to get currency into the country dis
tricts. A shipment of 100000 in small
| silver certificates has just been made to
st. Louis In return for an equal amount of
gold coin surrendered to the New York
subtreasury. Gold certificates are also be-
| ing received at New York In exchange for
the payment of gold coin at New Orleans.
New Orleans has received this month near
ly $300O,OO0 in small notes of various
classes.
Gold Not Needed.
The treasury Is refusing to issue silver
certificates and other small notes at in
terror points in exchange for gold surren-
dered to the subtreasury at New York,
because the gold is not needed to strength
en- the reserve. The policy of shipping notes
from Washington to interior points in re-
turn for gold at New York was adopted
when the gold reserve was low, because the
banks profited by the express rate on the
currency in one direction, and often direct
ed their New York agents to deposit the
gold In order to obtain this benefit.
The treasury gold funds now stand at
223,54S,T 19, In addition to the gold held
against outstanding gold certificates, which
is s2il,o72,073 There is no motive to in
crease the government gold holdings, and
there are decided motives for holding onto
the narrow margin of paper currency, for
which there is great demand.
Increase In thu. Circulation.
A severe pressure for. currency is not ex-
pected by the treasury officials because of
the great increase in the available supply
which has been made, within the past year
The treasury has paid out in premiums on
bonds under the refNndtng law S33. 165.0s3
and has paid in sthe redemption of the
old per cent bonds under the recent call
of Secretary Gage rf2o,oGly140. These two
Items Of more thap $53-DA0,o0o have been
exclusive Of the ordinary expenses of the
government.
Their influence insswelliifg the circulation
is only fraction of the effect of the
funding law IN stimulating the increase of
bank note circulation. The success of the
law in this respect has been great. even IL
It has failed TO denYDnstrase the popularity
of per cent bnnd with ordinary in
vestors. The bonds pledged TO secure cir
culation have increased from S234 4S4 $40
at the beginning OF the year 1900 to $780,
G92.s3O on Saturday last.fir The incnease in
the net bank note ciraiIla ton Is even larger,
| carrying the total .ectrcu1ation from s248,-
I 1883 at the beginning, of the year. to
S32j,9l5'4a on Saturday last. The limit of
increase has now been nearly reached and
Is about the amount predic ted iH ahese coll
umns when the law took effect. This item
of about $50 600 900. Gadde to the special
disbursements of the treasury. makes the
total sources of benefit to the market UNI
der the policy of Secretary Gage during the
present year about sl33, 200 OGO The net
surplus of ordinary receipts has been con-
siderable during this time, but the cash bal
ance of the treasury has been reduced
about $2oe00.606 below the amount in
March. when the gold standard bill became
law. rms item, with the increase in bank
circulation. affords net increase In the
money in circulation, aside from the usual
movement Of gold production amounting 70
at least 100000, 600.
Success of the Refundina Law.
The success Of the refunding law has
been nearly complete, so far as the bonds
held by the national banks are concerned.
There are about s23 300 900 in bonds avail
able for refunding which are. still pledged
but the other bonds formerly pledged have
been exchanged for the new per cents.
The latter now make up 1891 PIT 800 of the
total bonds pledged to .secure circulation
which stands at 5000, o92 $50. The banks
also hold Si6221 700 of the new per cents
as security for deposits OF public money.
making total bank holdings of about SaoI :
800 0OO.
The total exchanges Of old bonds for the
new per cents have reached 1888 1866 100
The movement seems to be nearly at an
end. but bonds were received for exchange
on Saturday to the amount of 1929, 800. The
new bonds seem to drift almost entirely in
to the hands of national banks, because Of
the peculiar advantages extended to bank
circulation when secured by these bonds.
The bonds offered for exchange from other
sources than national banks have been $685.
OBJ 100 but the figures show that only a
little more than S25 900 600 have remained
in private hands or are in process of trans
fer. The following table exhibits the pro-
portion of different classes of bonds re-
funded and the premiums paid UP to the
last classification Friday of last week:
Refunding operations 10 September u,
1900. -
Glass of Outstanding Amount Differences
bonds. Dee 81. 1899, refunded. paid
per cents. S19S $4,000 SO, 45s GOO $i321 To3
per cents. 54 1896. $50 go, 3d. 100 23540 100
per cents..... 95,009,7O0 %, $4,000 1903, go
Totals. $3.50 o55 go $685., sol 800 $40, 1s5 os3
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