New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1902-10-05
LESLIE NJ. SHAW. Secretary.
RlnGELY AND THE RESERVE.
No DISAGREEMENT WITH SECRETARY
sHAw-HOw THE MIsUNDER-
STANDING AROSE
IBv TELEGRAPH TO THE TRIBUNE. }


Washington, oct. 4.-There is not and has not
been any disagreement between Secretary shaw
ana controller Rdgely over that feature OF Sec
retaf shaw = plan for relieving the financial
S'rIhsency which contemplates relieving the de-
positary banks from the necessity OF maintain
ihg reserves against government deposits The
Misunderstanding which arose on this subject
resulting In the brief panic in Wall Street YES
leFuay Is IN some measure at least due TO the
neglect of either Secretary Shaw or Controller
hidgeIy 20 make authoritative statement "a
70 Just how that feature Of the plan was 70 be
carried out \ clear statement was made by
the controller to-day. Mr.. Ridgely said that
While the rational banks holding government
deposits wouid not. Tor the present at Ieas. be
required 20 maintain reserves against such de-
postts. he did not intend 10 issue a formal cfrcu
lar otncially giving them this information The
banks knew. unofficially. he said. that reserves
against government deposits would not be re-
quired- Al the same time he said the Control
Ter ONCE might continue 20 send out the regular
form Of notification 20 all banks which failed
TO maintain the reserves but il would be under
stood by them that the penalty OF closing the
bank and appointing a receiver would not be
enforced against any bank which maintained a
reserve equal TO the amount made necessary by
its deposits exclusive of government money
IIe law CledEly makes II discretionary for the
Secretary Of the Treasury and the Controller OF
the Currency 10 enforce this penalty or not as
they may deem wise. Without. therefore go
ing into the question OF whether the law con-
templates the inclusion of United States depos-
its in the aggregate deposits OF a bank In cal
culating the amount OF reserve II should have
on hand. the Secretary and the Controller are
satisfied that under present conditions. they
are justified In abstaining from enforcing the
penalty when the reserves of bank are de-
pleted to amount no greater than the pro-
been required to hold against its United States
deposits
There can be question as to the absolute
safety Of this course TO the government. for
every dollar of United States money on deposit
in the banks is more than covered by securities
deposited by the banks In the United States
Treasury The requirement that reserves should
be held against United States deposits is so un-
necessary as a measure of protection TO the gov
eminent that much doubt has been entertained
as 10 whether Congress INTENDED that such de-
posits should he included In the language "ag-
sregate deposits" used by the sta tutes and
former Controllers Of the Currency have recon-
mended a modification of the law spscif-
cally 10 exempt United States deposits from re-
serve requirements.
course that Mr. Shaw and Mr.. Ridgely are pur-
suing. II Is we'll known that in the panic OF
1893 Controller Eckels allowed many banks 20
fall behind in their reserve and TO remain behind
for months. Any other course on his part would
have led TO the closing of the doors of many in
stitutiOns which his leniency enabled TO weather
the storm, and the disasters OF that panic would
have been much greater than was the case.