The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1902-10-27
Treasury Securities.

mittee on state and municipal bonds which
are offered as security for public deposits.
1t was decided to take into consideration
any American municipal bonds in addi-
ton to the securities authorized by the
New York state law for the investment
Of the savings banks, to which the debt,
exclusive Of the water debt and sinking
fund, is less than Z per cent Of the valua-
ton Of the city for purposes of taxation.
Secretary Shaw, in his efforts to relieve
the money market in New Y ork where re-
serves had been pulled down to a pretty
low figure, up to the middle Of September
resorted to, the prepayment OF interest ana
Increase Of deposits Of internal revenue
receipts in the national banks and he In
vited the nationals to take out mare cir
culation by the deposit Of government
bonds as security. The banks objected
that it would be Improbable to buy bonds
at the somewhat high prices and 1t was
difficult to borrow bonds for the purpose.
The remedial measures used did not bring
the bank reserves up to the proper figure
and the secretary authorized the banks
to substitute other securities than govern
ment bonds against the government de-
posts, interpreting section 6lo3 OF the
revised statutes as sanctioning the sub
situation the clause reading, THE secre-
tary Of the treasury shall require the as
socations thus designated Gas depositar-
ies) to give satisfactory security, by the
deposit of United States bonds and other
wise for the safe keeping and prompt pay
ment Of the public money deposited with
them" etc. The clause is certainly thus
interpretable and is so regarded by many
expert fnanciers.
Secretary Shaw has accepted some $l1,-
Oo0. 900 state and municipal bonds as sub
stitutes for the government bonds used
to secure deposits and these latter bonds
have been used as a basis for new circu!a-
ton.
No secretary Of the treasury before
Secretary Shaw has authorized the sub
stitution of other securities than gov
eminent bonds as security for government
deposits in the national banks. but the
secretary has, no doubt, interpreted the
statute correctly. Some railway oonds
would be equally good security as first
class state and municipal bonds (gold, I'M
defaulted. regularly listed, selling above
par for a term of years, secured by mort
gage on roadbed and track). -. IL.
The securities committee Of the treasury
has accepted the state bonds or sVr'
ginia, Maryland and Massachusetts and
IF
delphia, Baltimore, Boston, st. Louis and
other cities and has under consideration
Chicago city bonds on the showing or the
controller that the percentage of the DEBT
against the assessed valuation is 47S PEI
cent The controller thinks the accept
ance Of the bonds by the government as
security for government deposits woulo
enhance their value two points.
Secretary Shaw has, during the past
three months, made some Sl2V:ooo'oo'
available to the banks to relieve the none!
strfngency Last March he discontinued
the purchase Of bonds to which practice
Secretary CAGE was addicted both to re-
duce the surplus and relieve the money
market when money was tight. LatterlS
Mr.. Shaw has gone into the market as
large purchaser of bonds, the prepayment
Of interest and deposit of internal revenue
receipts in the nationals not having II
his opinion, sufficient relieved TN
money market, and the price OF govern
ments has, as usual, advanced. In
money striugency has been mainly stool
exchange money stringency, but suc'
stringencv always has more or less erec
upon the volume Of money accommodation
essential to the needs Of general DUST
ness The stringency has been practically
removed and, apparently, conservative IN
e,,anoes IN New York are checking ten
denotes to fervid speculation IN STOCKS