Omaha daily bee., 1902-09-30
THIRTY MILLION AVAILABLE
Result Evident To-day Of shIw's Ruling en-
Bank Security.
RELEASES GOVERNMENT DEPOSIT RESERVE
Holds that the Deposit ~ Sufficiently
Secured by Government Bonds
Lively Shakeup on Wall
street. T.

NEW YORK Sept 29-Secretary Shaw,
whose visit to town was regarded as espe-
cialy significant, called at the subtreasury
late in the afternoon. While in the financial
district he saw several bankers, including
his predecessor, Lyman ]. Gage, now pres
ident OF the United States Trust company;
Vice President Hepburn, OF the Chase Ma
tional bank and Vice President Vanderlip
Of the National City bank. Secretary Shaw
was in constant communication with his
subordinates at Washington during the
evening.
| Later he issued a statement in which he
says that the banks will not, hereafter be
required to carry a reserve against gov
ernment deposits secured by government
bonds. This will make available tomorrow
over $40, 100000.
Secretary Shaw declined to discuss the
financial situation, further than to say
that the treasury would cooperate with
the banks far possible, both in the
east and the west in their effort TO supply
the necessary credit to supply the unprece-
dent amount Of business that is taxing rail-
roads and steamship lines to the utmost.
Mr.. Shaw said he had never seen any
good reason why banks holding a govern
ment deposit secured by government bonds
should be required to carry reserve
against 1t. First Il is a deposit not likely
to be called in time of stringency, and
second II called the collateral will always
sell for cash in excess of the deposit. He
has, since he took control Of the treasury
contemplated relieving the banks of this
burden.
Comptroller is with Him.
The comptroller Of the currency agrees
with the secretary, and therefore, 1t is an
nounced that hereafter banks will not be
required to carry reserve against govern
ment 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 OF $3.50 ,00O.-
900, against which they have heretofore
been compelled to hold more than sac, ,00O,-
900 gold or its equivalent. This decision
will release that much and $50, ,OO0. 900 ad-
ditional credit. The secretary said he would
continue to make deposits OF internal
revenue and miscellaneous receipts (all
available for that purpose). practically half
million per day long as the situation
required, and IL banks were unable to OBJ
tain government bonds to secure the same
he would accept the same general class Of
securities, municipal bonds, etc. as are
made available by the laws of the several
states for saving banks. BY this It is not
intended to loan in excess Of 65 per cent Of
the par value and nothing would 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 that he would
, accept security for the class described
, above. for portion of the deposit held by
each bank now holding a government de-
posit and release enough per cent con-
soils to cover any increased currency that
the bank may decide TO issue.
, Began Preparations in July.
= He has recognized the possibility of pres
ent conditions, and therefore, as early as
, last July, commenced printing currency pre-
\ paratory to the needs OF the banks to han
die the increased business Of the fall trade
and has on hand, ready to be delivered, an
aggregate of about s25, 100000. This can be
sent out at the probable rate OF 81, ,OO0. 900 q
day II the banks desire to substitute the
, other security above designated for the re-
lease Of the consols. This step was con-
, templated when, some months ago, he
! asked the banks holding government de-
=. posits to order additional currency printed.
. The secretary's additional relief, therefore,
A may be summed up as follows;
A First the release Of practically $50, 900, 900
q reserve, which will permit the banks to
increase their volume OF business $3.50 00O,-
: 900.
: Second. the substitution Of other secur-
Is ity for consols now held by the government
n on condition that the same shall be used
as basis for increased circulation, which,
z II accepted by the banks, will Immediately
S increase the volume twenty or twenty five
: millions and will add thereto II needed.
! Third, continuation Of deposits to the limit
II allowed by law, accepting II necessary Sc
curity other than government bonds.
Secretary Shaw will remain in New York
= tomorrow and expects to visit the financial
a district.
o Shakeup on stock Market.
With call money up to S5 per cent and
= q number of other adverse circumstances,
todays stock market received a very Sc
- we're shakeup, net losses ranging from two
to ten points.
The greatest loss was sustained by Louis
Vile & Nashville. disappointment regard
ing the probable disposition OF the road
= as much as anything else is supposed to
As have caused the break. other features
81 that combined to unsettle the market were
10 disquieting reports concerning the presi-
n, dents condition. the prolongatlon OF the
Of coal strike and the indubitable fact thai
III London and the continent are unloading
E. Americans" in large blocks.
lie Practically all the money loaned today
A. came from trust companies and out-of.
D. town corporations and private individuals
he The banks OF the Clearing House associa-
ne tion stood alOOf and made practically ne
TX loans for speculative purposes Moreover
the so-called substantial interests offered
L no support to the market, which with few
10 exceptions, including Atchison and st. Paul
ne closed at the lowest level
n The Offices Of J. P. Morgan Co. and
other leading banking houses were active
- during the day. Mr.. Morgan and his asso
" ciates conferred with some Of the NOR,
prominent hnanciers, including Presiden
Vi Stillman OF the National City bank, Presi
dent Baker OF the First National bank an,
President Hendricks OF the National Banl
Of Commerce. None OF these gentlemen
would discuss the situation. except to sal
no that further liquidation OF stocks woul
q clarity the financial atmosphere.
The market opened weak and lower al
around Londons attitude having a marke
effect in that direction. Call none
-, opened at IS per cent, went on point o