Omaha daily bee., 1902-09-14
Four Million Dollars Will Be Released
in This Way at Once
OCTOBER INTEREST TO Be PAID NOW
No Evidence Of a Currency Famine, Yet
Emergencies Are Prepared For
BANK BONDS TO BE REDEEMED NOW
Complaints of New York Bankers Are
Easily Answered by the Action
of the Nations FinRn-
cIaI Chief.

WASHINGTON, Sept. 13.-Secretary
Shaw today issued the following state
ment:
Secretary Shaw has made arrangements
to release about S4,00O,00O Of the treasury
holdings. He has had a list prepared OF
those national banks throughout the coun-
try which held free or pledged bonds at
the date Of their last report and has made
inquiry for others. After making allow
ance for changed conditions since the last
report he expects this will release at least
81 900 900.
He has sent notice to all such that II
they will send these bonds to the treas
urer OF the United States in sums of $780,
900 or more they will be designated as
temporary repositories and the face value
OF the bonds will be deposited with them
to the credit of the treasurer of the
United States. He has pursued this
course in preference to designating de-
posltories in the ordinary way, which COM
pels them to buy bonds in the market at
a large premium, thus paying out more
for the bonds than they get from the
government. The customs receipts are
extremely heavy at this season Of the
year, and the cash balance Of the treas
urer has been gradually increasing.
Anticipates October Interest.
He has also decided to anticipate the
October interest, amounting to about
"a, 200 900, and with this in view orders
have been issued to the various sub
treasures to cash such coupons as may
be presented and the treasurer of the
United States has been instructed to mail
checks for interest on the registered
bonds. All this was decided upon some
days ago and letters and kilograms pre-
pared for today.
The secretary sees in present conditions
no occasion for alarm. He calls attention
to the fact that there is no evidence OF a
currency famine present or prospective,
elsewhere than in New York, and even
there the rate is not high for commercial
paper, and for commercial paper he has
the greater solicitude. He is we'll satisfied
with his efforts to increase the circulation
which he decided upon in the early summer
whom present conditions were visible and
has been preparing to meet an emergency
which he does not expect, but which he
thinks it Is wise to provide against.
Thus far he has made requests only of
such banks as hold large deposits and have
very limited circulation, and he is not ask
ing these to increase to the maximum, nor to
increase at all for the present. He does
ket to buy bonds at a rate higher than the
government is willing to pay. He does
desire to make the best possible use OF
the free bonds now held by the banks.
Incidentally, he likes to encourage banks
to hold free bonds during the dull months,
believing 1t is much better to hold bonds
that will yield one-half Of 1 per cent even
than to make new loans at 2 per cent. There
fore, he is giving banks that hold these
free bonds an opportunity to use them TO
most excellent advantage. This method II
pursued by the banks, would give a slight
element Of elasticity to our otherwise
inelastic currency system.
Position Explained in Letter.
His position as regards increasing circu-
lation is perhaps best expressed in a let
ter which he recently wrote to a banker
who had been already buying bonds, and
which he has consented to make public. 1t
is as follows:
TREASURY DEPARTMENT. Washing
ton, -, c.. Sept. 10, 1902: My Dear Sir
Your letter of the sth is received. I find
II we'll nigh impossible To convey the pur-
port of my request even to the banks, of
whom have made the request, much less
to the public.
First-In case of imminent danger, or
actual disaster, / will be compelled to use
government deposits TO buy Increased cir
second-I desire to have from fifteen to
fifty millions additional circulation printed
prepa so that II can be issued in
four days, instead of forty,
Third will be glad TO have the banks
holding deposits TO arrange, II they can,
FOURTH desire TO send no bank into
the market to buy bonds at the present
time.
Fifth--I do not care 20 have the cur
erncy issued unless conditions make II well
nigh imperative.
/ am making no demand upon any bank.
The amount OF their circulation must be
much as the public holds the secretary of
the treasury somewhat responsible for ex-
listing conditions, 1 deem myself justified
| in using the public funds now held by
various, banks on deposit as / think best
| for the public good, and, in case of trouble,
creased circulation, the banks now holding
such funds having preference.
Later in the day the following was given
out at the Treasury department.:
The New York banks are complaining be-
west is reducing their available cash.
| They, therefore, ask that they be allowed
| to go into tire market pay N,lOOOO0 for a
million bonds and receive from the treas
ury a million deposit with the bonds. They
| seem willing to do this and increase their
! liability. Thus the banks would decrease
! their available cash S3o0,0O0 but they would
| be drawing the interest on the bonds In
! stead of this the secretary is lOaning "a
! any bank wherever situated upon it's free
! bonds In this way the western demand
| upon the tanks will be relieved and they
| viii only have to protect themselves.