The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1902-09-30
$30,O0O,OOOM MORE
Secretary Shaw Has Other
Plans to Relieve Stringency.
Will Accept Municipal Bonds as
Basis of Circulation.

New York, Sept. 30.-Secretary of the
Treasury Shaw has issued a statement
In which he says that the banks will
hereafter not be required to carry
reserve against government deposits Sc
cured by government bonds. This will
make available over $40, 0000 0O
Secretary Shaw declined to discuss the
financial situation further than to say
operate as far as possible with the
banks in their effort to supply the nee
essary credit to do the unprecedented
amount Of business that is taxing rail-
roads and steamship lines as we'll as
banks to the utmost.
Mr. Shaw said he had never seen any
good reason why banks holding a gov
eminent deposit secured by government
bonds should be required to carry re-
serve against it. First 1t is a deposit
not likely to be called in time of
stringency; and second, if called the
collateral Will always sell for cash in
excess of the deposit. He has since he
took charge of the treasury contem.
plated relieving the banks of this bur-
DON
The comptroller of currency agrees
with the secretary, and therefore it is
announced hereafter that banks will not
be required to carry a reserve against
government deposits secured by govern
ment bonds.
The treasury has on deposit with va
rlous banks scattered throughout the
country from Maine to California and
from Minnesota to New Orleans ii.
round numbers one hundred and thirty
millions, against which the banks have
heretofore been compelled to hold more
tnan thirty millions of gold or it's equiv
aient. This decision will release that
much reserve and thirty millions addi-
tional credit
The secretary said he would still con-
tinue to make deposits of Internal revenue
ana miscellaneous receipts (all available
non per day. as long as the situation re-
CURED 1t and If the banks were unable TO
retain government bonds to secure the
class of securities, municipal bonds. etc
IS are made available by the laws of the
several states for savings banks By this
II Is not intended to loan in excess of
sixty-fve per cent of the par value and
nothing will be accepted that has not been
panlc-tr1ed and proven salable for cash
on call. He said he should of course de-
ternine each case by itself The secretary
further said he would accept security of
the class described above for portion
of the deposits held by each bank
now holding a government deposit and
release enough two per cent consols to
cover any increased currency that the
bank NAV desire to issue He has recog-
nized the possibility of present conditions
and therefore as early as last July COM
menced printing currency preparatory to
the needs of the banks to handle. the
Increased business of the fall trade and
has on hand ready to be delivered an
aggregate of about SO, 600. This can be
sent out at the probable rate of five mil
lions a day If the banks desire to isubsti-
tute the other securities above designated
FOR the release of the consols. This step
was contemplated when some months ago,
he asked the banks holding government
deposits to order additional currency print
ed The secretary's additional relief there
fore may be summed up as follows:
First, the release of practically thirty