The Montgomery advertiser., 1902-09-30
MILLIONS TURNED LOOSE
Radical Measures Adopted by
 the Secretary.
Municipal and State Bonds W1ll Be Accepted by the Department for Portion of Deposits
 Held by Banks.

. Treasury Shaw. who was in New York tonight has issued statement saying that the banks will hereafter not be re- quired to carry a reserve against Gov ernment deposits secured by Government bonds. This will make available tcmor- row over $3o.ooo0oo
 Secretary Shaw declined to discuss the financial situation other than to say that the treasury would cooperate as far n possible with the banks, East and West, in their effort to acquire the necessary credit to do the unprecedented amount of business that is taxing the railroad and steamship lines as well as the banka to the utmost.
 Mir Shaw said he had never seen any good reason why banks holding a Gov- ernment deposit secured by Government bonds should be required to carry a re- serve against it.
 First, 1t is a deposit not likely to be called in time of stringency; and, sec- ond. If called, the collateral will always sell for cash and in excess of the de- posit. He has. since he took control of the treasury, contemplated relieving the banks of this burden.
 The Comptroller Agrees.
 The Comptroller Of the Currency agrees with the Secretary, and, therefore. 1t is announced that hereafter banks will not be required to carry a reserve against Government deposits secured by Gov- ernment bonds.
 The treasury has on deposit with vari- ous banks scattered throughout the coun- | try, from Maine to California, and from Minnesota to New Orleans, in round | CT nn IA have heretofore been compelled to hold l more than thirty millions of gold or it's | equivalent. This decision will release that much reserve and $300o0,000 addf- tional credit.
 The Secretary said he would continue to make deposits of internal revenue and miscellaneous receipts Gall available for that purpose: practically $5o0.000 per day, as long as the situation required, and if banks were unable to obtain Govern- ment bonds. to receive the same class of securities, municipal bonds, etc., as are made available by the laws of the several States for savings banks. By this 1t is not intended to loan in excess of 65 per cent of the par value. and nothing will be accepted that has not been panic-tried and proved salable for cash on call He said he should, of course, determine each case oy itself.
  cept security of the class described above for a portion of the deposit held by each bank now holding Government deposits and release 3 per cent consols to cover any increased currency that the bank may desire to issue.
 Prepared for Emergency.
 He has recognized the possibility of pres ent conditions and, therefore. as early as last July, commenced printing cur rency preparatory to the needs of tho banks to handle the increased business of the fall trade, and has on hand ready to be delivered an aggregate of about $26.- 000, 600. This can be sent out at the prob- ably rate of s5.000o00 a day if the banks desire to substitute the other security above designated tor the release of the consols. This step was contemplated when. some months ago, he asked the banks holding Government deposits to or- der additional currency printed.
 The Secretary's additional relief. there fore, may be summed as follows:
 First, the release of practically $50, ,000,- 900 reserve which will permit the banks to increase the volume of business $s0,- 0O0,0 900. Second. the substitution of other security for consols now held by the Government on condition that the same shall be used as a basis for increased circulation, which. If accepted by the banks, will immediately increase the vol tune about $25, 100000 ,and will add. there to if needed. Third, the continuation of deposits to the limit allowed by the law, accepting, if necessary, security other than Government bonds.
 Secretary Shaw will remain in New York tomorrow and expects to visit the financial district.