The Abbeville press and banner. [volume] (Abbeville, S.C.) 1869-1924, 1902-10-15
TO END MONEY STR|NGENCY
Secretary Shaw Valves the Reserv'
Against the Government Deposits.
RELEASES slso,ooo,Ooo CREDIT

Tho Secretary Of the Treasury Will Al
Low Substitution Of Csy"ain Securities
For Consols and ArraaGss For In.
dueeusnt to Increase CirculatIou-Un-
prsosdsntsd Amount Of BusInsss.
New York City.-Secretary Of the
Treasury Shaw has made arrange
ments which make available $780,
100000 additional credit.
MI. Shaw. during his visit to, the
city, declined to discuss the situation
further than to say that the Treasury
would cooperate as far as possible
with the banks both East and West In
their effort to supply the necessary
credit to do the unprecedented amount
of business that Is taxing railroads and
steamship lines as well as banks to the
utmost.
He said he had never seen any good
reason why banks holding Government
deposits secured by Government bonds
should be required to carry q reserve
against 1t. First. 1t Is q deposit not
likely to be called In q time Of strin-
gency. and second. If calleu. the col
lateral will always sell for cash and In
excess Of the deposits. He has had In
mind ever since he took control or
the Treasury to relieve the banks OF
this burden.
The Controller agrees with the Sec
retary. and therefore 1t Is announced
that hereafter banks will not be re-
quired to carry a reserve against Gov
ernment deposits secured by Govern
ment bonds. The Treasury has on de-
posit with various banks scattered
throughout the country from Maine to
California and from Minnesota to New
Orleans In 1ound numbers $l30.OOO.OOO.
against which they have heretofore
been compelled to hold more than $780,
600. 900 of gold or Its equivalent. This
decision has released that much re.
serve, and therefore made available
$3.50. .0OO.0 600 additional credit.
The Secretary said he would con-
tinue to make deposits Of internal rev.
enue and miscellaneous receipts (all
available for that purpose). practically
$500. 900 per day. so long as the situa-
ton required, and II banks were unable
to obtain Government bonds to secure
the same. he would accept the same
general class of securities as are made
available Dy the laws of the several
States for savings banks. BY this 1t Is
not intended to loan In excess OF sixty
five per cent. Of the par value. and
nothing will be accepted that has not
been panic.tried and proved salable for
cash. He said he should Of course
determine each case by itself.
The Secretary further said he would
accept security Of the class described
above for q portion of the deposit held
by each bank now holding q Govern.
ment deposit and release enough two
per cent. consols to cover any increased
currency that the banks may desire to
Issue. He has recognized the possibil-
ity Of present conditions, and therefore
as early as last July commenced print
Ing 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 aggre-
gate Of about $25, 100000.
This can be sent out at the probable
rate Of $5.OOO.O00 a day II the banks
desire to substitute the other security
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 printed. The
Secretary's additional relief therefore
may be summed up as follows:
First. the release Of practically $780,
100000 reserve. which will permit the
banks to increase their volume Of busi-
ness $3.50 100000.
Second. the substitution Of other Sc
curity for consols now held By the Gov
ernment on condition that the same
shall be used as basis for increased
circulation. which II accepted by the
banks. viii Immediately increase the
volume SIC. 100000 or $25. 600. .0G0. and
will add thereto. II needed.
Third. the continuation Of deposits to
the limit allowed by law. accepting. IL
necessary. security other than Govern
ment bonds.