Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1902-10-03
Secretary shaw's Action Saved
the Stock Market Without the
Actual Cash
THE CONFIDENCE WAS RESTORED
Few If Any Banks Took Advantage of
His Offer to Release Reserves on
Deposit of Approved seeurities-A
Good Bank Statement Will Be Pre-
sented Saturday.


set aside by banks holding government
deposits to secure the same turns out to
be impossible of adoption.
Not only is 1t declared to be contrary
to the statutes but further it does not
lie within the authority of the treasury
department to issue any orders relative
to such reserve. The matter in ques-
ton is within the jurisdiction of the
comptroller of the currency alone, and
he hasn't issued any orders bearing on
the subject.
1t is significant that the official circu-
lar issued from the treasury depart-
ment omits any mention of this impor-
3tant question of releasing the 20 per
cent reserve AS it was this PROPOSE
ton which brought the secretary to
New York and which relieved serious
SITUATE it is evident the department
has found that the relief proposed can
not be legally afforded.
The monthly treasury statement
shows there are government deposits OF
$136.625, 10. The banks holding this
money keep aside 25 per cent of the
total, being an amount as deposits
stand at present, of s34,156.2s2. 1t was
this sum which the treasury depart
ment proposed to permit the banks TO
lend instead of keeping in their vaults.
However, not a cent of il can legally be
released.
The result of the offer shows what an
extraordinary influence sentiment ex-
erts. The stock market was demoral-
lied Monday night and the best people
here expected a panicky day following
the opening Tuesday morning. Money
closed the night before at S5 per cent
and the banks expected to call more
loans.
At 10 o'clock Monday night Secretary
Shaw announced he would release $780,
100000, and that this would be equiva-
lent to an extension of credit amounts
ing to $3.50, 00O,0 600, tho the latter figures
may be left out of consideration. No
enc knew what the secretary proposed
doing. and when Tuesday morning the
napers contained announcements that
the entire situation changed. Stocks
jumped from / to points between sales
and money dropped Ia FER cent.
But it was all sentiment. No new
money had been or could be released,
and nothing whatever has been added
to loanable funds. The panic, however.
is over. 1t all goes to show that coun-
terfeit is as good as genuine money, so
long as the users do not know the diff
ference. In the present instance there
was not even the semblance of money
but human breath.
AS tribute to the secretary and a
further effort to save themselves worry
1t is proposed to have the bank state
ment next Saturday show a reserve call
culated against deposits other than
government money. That is to say, $780,
100000 government funds are, held by
New York banks. The legal reserve
against this is $1O,0OO,OO0. BY not reclS-
oning this amount the total reserve
shown will be $1O,OOO,OO0 higher than
and this will make a good
bank statement.
In discussing the subject the assist
ant manager Of the clearing house said:
1.-The figures we issue here every Sat-
urday are those Of a voluntary associa-
with the manner in which the banks
must report their condition to the con-
troIler. The members of this associa-
ton make a certain report to US and we
issue 1t as a matter OF information.
the statement will contain the
facts contained in other statements,
except they will be divided differently.
and any one may compute from these
figures the excess reserve as was for
merly DONE"
If the secretary OF the treasury
should follow the advice of the large
banking interests here he would ask
FOR offers of government bonds,with a
view Of purchasing them, and thus
turning outright money into circula-
ton. The long tours are suggested as a
desirable issue to offer to buy. This
Issue, according to the last treasury
statement, was as follows:
Total outstanding, $134,994,000.
Held by the banks, $10,S52,35O.
II the treasury should succeed in pur-
chasing, at fair price, s20,OO0.O00 OF
these bonds 1t would release an amount
Of money equal to their par value, plus
the premium at which they are selling,
with the added premium the secretary
would have to pay, or total Of about
s2S, 100000. 1t is suggested that the de-
partment pay or IL points above the
market rate.
So far as the offer to accept bonds
other than government issues to secure
deposits is concerned not a great deal
Is expected from 1T.
NATIONAL BANK STATISTICS.