Omaha daily bee., 1902-09-16
ma sER1oLs MONEY CRISIS.

The preparations made by Secretary
Shaw for an additional supply of cur
rency, aud the tenor Of his statements
in announcing them, indicate very
clearly that he does not believe a grave
crisis has been or is likely to be reached.
He expressly says he sees in present
conditions, no special occasion for alarm.
His response to the appeal of eastern
banks for treasury help, while II is be
lieved to provide sufficiently for any
real need, embodies some novelties of
method which will hardly be relished in
those quarters so much as in the country
at large.
An eastern cry for treasury assistance
is raised almost annually, for at his
season there are always heavy drafts
upon New York and the east for cur
rency for the crop movement, which,
because hardly ever fully provided for
in advance, are sure to have q disturb
ing effect. 1t is an old trick of he
banks to spread alarmist reports and to
try to persuade the treasury to swell
bank deposits or to buy bonds at an
%exorbitant bonus. 1t has more than
once happened under such circumstances
that eastern banks, holding treasury
funds on indefinite deposit, and at the
same time large amounts of free bonds
which they might pledge with the treas
ury for circulation, have actually forced
the secretary into the open market to
buy bonds with the undeposited sur
plus, an expensive and losing game at
both ends, which Secretary Shaw does
not propose to play.
For such need as may exist antici-
pating October interest two weeks on
national bonds has been authorized by
the secretary as a partial remedy. This
is not unusual, but his other proposition
directly throws al important RESPONSE.
bility upon the banks themselves. OF
the $445, 100000 of 2 per cent bonds,
$135, 100000 remain unpledged for ma
tional bank circulation. AS these bonds
are largely in the hands of the banks,
they are available for immediate expan-
sion of money volume on the %secretary's
plan. He has had bank notes printed
in advance, so that orders car be in
stantly filled, and on deposit of these
bonds the currency will be issued to their
full value. Not only so, but a list of
banks known to have such bonds has
been compiled, and there is in the sec
retary's statement and plan the broad
suggestion that. if necessary, he would
withdraw deposits from such banks for
purchase of bonds. But any bank hav-
ing free bonds or able to secure the use
of them, a be promptly accommodated
with increased circulation.
General conditions do not foreshadow
an acute monetary reaction throughout
the country. 1t does not even appear
that the drafts upon the east on account
Of crops are of unusual magnitude
The reports all show the western banks
to be In strong position. Even in New
York where pressure upon currency sup.
plies is most severe, the ordinary danger
signals are wanting. Commercial rates
of interest are not severe. A genuine
money famine is invariably followed by
a pronounced downward movement in
the stock market. but Notwithstanding
the enormous advances in the great
body of stocks the last six or eight
months the week just closed has wit
messed a material further advance in
the market.
The arrangements made by Secretary
Shaw may be reasonably expected to
afford all the increase of circulation
necessary to relieve any temporary ex.
igency. 1t is to be remembered, too
that the dominant financlers and cap
tains Of industry are in a position in
which they are interested in forestalling
rather than in precipitating a serious
money crisis. Back of this is the fac
that the national treasury, by reason Of
the autumn importations, is daily piline
up an increasing surplus. The mere
precautionary action of the treasury Il
q strong moral influence,