Deseret evening news. [volume] (Great Salt Lake City [Utah]) 1867-1920, 1902-09-30
Secretary Shaw Comes to Relief
Of the Money Market
AID Is THIRTY MILLIONS.
fond security WIN Hereafter be sui
icient for Government Deposits
Secretary Declines 10 Talk,

New York, Sept 29.-Secy. OF the
Treasury Shaw, who was In New YORK
tonight, has issued statement IN
which he says that the banks here
after will not be required to carry
reserve against government deposits
secured by government bonds. rms
win make available tomorrow over $780,
900 0OO.
secy Shaw declined to discuss
the financial situation further than TO
say that the treasury department
would cooperate as far as possible
with the banks in their effort TO sup
ply the necessary credit to do the un-
precedented amount of business that Is
taxing railroads and steamship lines,
as well as banks, to the utmost.
Mr., Shaw said he had never seen any
good reason why banks holding a gov
eminent deposit secured by government
bonds should be required to carry re-
serve against it. First, It Is a deposit
not likely TO be called In time Of
stringenCy, and second, If called, the
collateral viii always sell for cash In
excess of the deposit. He has, since
he took charge Of the treasury, con-
templated relieving the banks Of this
burden.
The comptroller Of the currency
agrees with the secretary and there
fore it Is announced that hereafter
banks VIII not be required TO carry a
reserve against government deposits
secured by government bonds,
The treasury has on deposit With
various banks scattered throughout
the country, from Maine to California,
and from Minnesota to New Orleans,
In round numbers $3.50 900 600, against
which the banks have heretofore been
compelled to hold more than $50, 100000
Of gold or its equivalent. This deci ion
viii release that much reserve and 500
100000 additional credit
The secretary said he would continue
to make deposits Of internal revenue
and miscellaneous receipts TALL avail
able for that purposel practically a half
million per day, as long as the situa-
ton required. and II the banks we're
unable 10 retain government bonds to
secure the same, he would accept the
same general class Of secureties NUM-
cpal bonds, etc, as are made avail.
able by the laws of the several states
for savings banks. BY this It is not
intended to loan In excess Of 65 per
cent Of the par value, and nothing will
be accepted that has not been panic
tried and proven salable for cash on
call. He said he should of course, de-
termine each case by itself The sec
cretary further said he would accept
security Of the class described above,
for portion of the deposit held by
each bank now holding a government
deposit, and release enough 2 per cent
consols to cover any increased curren-
cy that the bank may desire TO issue.
He has recognized the possibility Of
| present conditions, and therefore as
early as last July commenced printing
currency preparatory 10 the needs OF
| the banks TO handle the increased bus
| iness OF the fall trade and has on hand
ready 10 be delivered an aggregate Of
| about $2500000 This can be sent out
| al the probable rate of s.. 600 900 day
| If the banks desire TO substitute the
other security above designated for the
release Of the cOnsols. This step was
contemplated when, some months ago.
he asked the banks holding govern
ment deposits TO order additional cur
rency printed. The secretary's addi-
tlonal relief therefore may be summed
UP as follows:
First, the release Of practically $780,
100000 Of reserve which will permit the
banks to increase their volume Of bust
ness $3.50 900, 900.
Second, the substitution Of other Sc
cureties for consols now held by the
government. on condition that the
same shall be used as a basis for in
creased circulation, which, II accepted
by the banks. will Immediately In
crease the volume $50 900. 900 or s25 co.,
GOO and will add thereto II needed.
Third the continuation OF deposits 10
the limit allowed by law, accepting. IL
necessary, security other than govern
ment bonds.
secy. Shaw will remain In New York
tomorrow and expects to visit the fin
anclal district.