The Savannah morning news., 1902-09-14
TO SUPPLY CURRENCY
SECRETARY sHAw's PLANS TO
EASE SITUATION.
TO CALL IN FREE BONDS.
GOVERNMENT FUNDS TO BE DE-
POSTED IN RETURN.

This VIII Release About $4,OOO,OOO
Cash-The October Bond Interest
of S4,2O0,OOO TO BE Anticipated
and Orders Issued for It's Payment.
The Government Has Lots of Idle
Is willing to Put Some of 1t In
Circulation.
Washington, Sept. 13.-Secretary
Shaw to-day issued the following
statement:
Secretary Shaw has made arrange
ments to release about $4,000, 900 of the
treasury holdings. He has had a list
prepared of those national banks
throughout the country which hold
free or unpledged bonds at the date of
their last report and has made in
quiry for others. After making allow
ance for changed conditions since last
report. he expects this will release at
least $4,000, 900. He has sent notice to
all such that If they will send these
bonds to the treasurer of the United
States in sums of $780, 900 or more, they
will be designated as temporary de-
positaries, and the bonds will be depos-
tied. with them to the credit of the
treasurer of the United States. He
has pursued this course in preference
to designating depositaries in the or
binary way, which compels them to
buy bonds in the market at a large
premium, thus paying out more for
the bonds than they get from the gov
eminent.
The. customs receipts are extremely
heavy at this particular season of the
year, and the cash balance of the
treasurer has been gradually increas-
ing. He has also decided to anticipate
the October interest, amounting to
about 81 POO 900, and with this in view.
orders have been issued to the various
sub-treasuries to cash such coupons as
may be presented to them for pay
nent, 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
prepared for to-day.
Sees No Cause for Alarm.
The secretary sees in present oondi-
tons no occasion for alarm He calls
attention to the fact that there is no
evidence of 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
solieitude. He is well satisfied with his
efforts to increase circulation. which
he decided upon in the early summer.
when present conditions were plainly
visible, and has the presses busy pre-
pairing to meet any emergency, which
he does not expect, but which he thinks
1t 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
asking them to increase to the maxi
mum, nor to increase at all for the
present. He does not desire to force
the banks into the market to buy bonds
at 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. Incl
dentally he likes to encourage banks to
hold free bonds during the dull months,
believing 1t is much better to hold
bonds that will yield ~ per cent. even
than to make call loans at per cent.
He is, therefore, giving the banks that
hold these free bonds an opportunity
to use them to most excellent advan-
tage. This method, If pursued by the
banks, would give a slight element of
elasticity to our otherwise inelastic
currency system.
New York Banks Complain.
Later the following was given out at
the Treasury Depa rtment:
The New York banks are complain
ing because the unprecedented demand
in the West is reducing their available
cash. They therefore ask that they
may be allowed to go into the market,
pay $1.100.000 for a million bonds and
receive from the treasury a million de-
posit with the bonds as security. They
seem willing to do this and increase
their reserve $250,000 against this in
creased liability. Thus the banks would
decrease their available cash $3.50. 600
but they would be drawing the interest
on the bonds. Instead of this, the Sec
rotary is loaning to any bank wher-
ever situated. upon its free bonds. In
this way the Western demand upon the
banks will be relieved and they VIII
only have to protect themselves.