New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1902-09-30
MILLIONS FOR BANKS.
SECRETARY SHA W TO RE-
LEASE s19O,OOO,O0O.
..SoTNCEs THAT. BEGINNING TO-DAY,
RESERVE AGAINST DEPOSITS Sc
CrRED BY BONDS WILL
NOT BE REQUIRED.

NOT BE REQUIRED
late last night Leslie NJ. Shaw. Secretary Of
-. rraae,,rx- who was at the Fifth Avenue
II.e1 announced that practically S30,OOO,Ooo
sarze viii be released this morning which
,1, Kermit the banks to increase their volume Of
business by S1300o0oo0.
Secretary Shaw declined To discuss the gen.
eral financial situation further than TO say that
the Treasury would cooperate as far as pos
sihle with the banks both East and West. IN
their effort u supply the necessary credit to do
1hA unprecedented amount Of business that IS
taxing railroads and steamship lines as we'll as
banks to their utmost.
He said he had never seen any good reason
why banks depositng government bonds as col
lateral should be required to carry a reserve
against the government funds secured by such
bonds First It is a deposit not likely TO be
called in time Of stringency. and. second II
called the collateral Will always sell for cash.
and in excess Of the deposit He has had IN
mind ever since ne took control Of the Treasury
70 relieve them from this burden The Con-
-rofler agrees with the Secretary. and. there-
fore. il is announced that hereafter banks VIII
not be required to carry reserve against gov
ernnoent deposits secured by government bonds
The Treasury has on deposit with various banks
scattered throughout the country. from Maine
20 California and from Minnesota 10 New-Or-
leans in round numbers S130ooOooo against
which they have heretofore been compelled to
hold more than S30000O00 Of gold or its equiva
lent This decision will release that much re-
serve, and therefore make available tomorrow
morning Sl300000o0 additional credit.
The Secretary said he would continue TO
make deposit of internal revenue and miscel-
laneous receipts tall available for that pur-
5aZ-
situation required. and if banks were unable TO
Obtain government bonds to secure the same. he
would ACCEPT the same general class Of securi-
ties municipal bonds. etc as are made availa-
hle by the laws Of the several States for savings
banks BY this il is not intended 10 loan in eN-
cess Of So per cent of the par value. and nothing
VIII be accepted that has not been panic tried
and proven salable for cash on call He said he
should. of course. determine each case by itself.
The Secretary further said he would accept
security Of the class described above for por-
ton Of the deposit held by each bank now hold
ing government deposit, and release enough
2 per cent consols to cover any increased cur
rencv that the bank may desire to issue. He
has recognized the possibility Of present cond-
tions and therefore as early as last July began
printing currency preparatory TO the needs of
the banks 70 handle the increased business Of
the fall trade and has hand ready TO be de-
nrered an aggregate of a. bout S25.000.000. This
can be sent out at the proba ble rate Of 5000
OG0 day if the banks desire TO substitute the
other security above designated for the release
Of the consols. This step contemplated
Wnen. some months ago he asked the banks
holding government deposits to order additional
currency printed. The Secretary's additional
relief therefore NAV be summed I'D fol-
lows:
Ffrct the release of practically S300oooo0 re
serve which viii permit the banks to increase
their volume Of business S130.ooo,ooo-
Second The substitution OF other security for
consois now held by the government on condl-
ton that the same shall be used as basis for
increased circulation which if accepted by the
banks viii Immediately increase the volume
S2oo9l0Oa or S25.0o0ooo and viii add thereto
ii needed.
Third. the continuation Of deposits to the
limit allowed by law. accepting, if necessary,
security other than government bands.
Secretary Shaw arrived the Fifth Avenue
yesterday morning. He out all the after
noon and said when seen at the time Of his re-
turn, that. besides attending to some other bust
ness he had spent some time at the Sub-Treas=
ruy. At that time, about 40 O'Clock. he said
that he was not prepared TO say whether ne
would take any official notice Of the days furry
in call money, but that he had been in com
munication with his secretary. and had ad-
dressed certain questions TO him, the answers
10 which would determine him TO whether he
would have anything to say later or not. He
was called up by long distance telephone
little later. and Immediately sought a stem
ographer. with whom he busy for two
hours
II was stated some days ago from Washing
ton that the Secretary was considering the ac-
ceptance of other securities than government
bonds on government deposits. The statute on
The subject of such security reads
The Secretary of the Treasury shall require
me associations thus designated (as depositaries
OF public money! to give satisfactory security by
me deposit Of government bonds and otherwise"
IL is understood that the Secretary interprets
lnas 10 give him the alternative of accepting
'ofos or other securities, so long as they are
satisfactory to him. Such Interpretation is new.
ana opens up many questions connected with
the whoie government financial system and its |
relations with the general banking business Of |
the country.