New-York tribune., 1902-08-29
MONEY TO MOVE THE CROPS
AT SUGGESTION OF SECRETARY SHAW
NATIONAL BANKS WILL INCREASE
CURRENCY

In anticipation Of a need for money IN
moving what in the aggregate near the largest
crops ever gathered In this country, the national
banks OF this city preparing 10 increase their
issues OF currency. They will borrow government
bonds which viii be deposited to their credit with
the Treasury Department against the new circu-
lation The arrangement has been made at the
suggestion OF Secretary Shaw. who was at the Sub
Treasury IN WalI-st. yesterday morning, and had
talks with several presidents OF national banks
There a report in the financial district that as
much as $4,000 00 in circulation might be pro-
vidcd TO prevent money stringency, but some or
the bank officials said the amount probably would
not be half so large. While Secretary Shaw was
at the sub-Treasury he gave orders 70 have issued
from the Washington Office the following statement
of the situation;
The Secretary recently invited some Of the larger
national banks In the prncipa! cities to order at-
dtional amounts Of circulating notes to oe printed
National banks are entitled t9 issue fg'aia1oa 10 10
capital OF national banks, is SEQ 60 600 but tae
ton TIE Secretary has hoped TO Introduce ee-
ment or elasticity Into the present system: His
cities that they make preparation IQr addluonai
Circulation have net with veyy favoraPe response.
It IS not his intention that they should issue thIs
sSse of aotGa asce5s8 and emerssncy He does
not propose to initiate the currency in any sense
raard shosi one arise. WITH tbs in View, those
Ihs, TIhs - $50 Ir5 b5 ass setrifv for such addtionai
circulation have sent in their orders and the Score
busily engaged IN expecting the preparation Of the
notes pending possible e-neTgencN-
AL this work of preparation does not indicate t5at
the Secretary VIII expect the banks 70 issue add
tlonal notes except In response 10 real necessity
The movement purely prudential and precau-
tionary. and intended To relieve any ossI5ie cur
rencv famine i does not conflict at all with any
Of the various other methods which have hereto
fore been employed by the department IN renewing
ibs money market,
A bank official said yesterday that the banks
could not afford % buy outright the government;
bends reedcd for increased circulation even II they
could be bought in the open market. He added.
7 douht = there are $4,000 Of government bonds
Whatever bidding 10 be done for them would
raise the price abnormal'y What it is planned %
do is TO borrow the bonds paving the original hold
ers at the rate Of per cent a year. ana then
United States TO the credit Of the e2nk "1ieh
wishes 10 increase its circulation The holder
makes a good profit. he secures with his coupon
and our interest payment per cent on his invest
when the demands for currency are heavy and then
rn+ire circulation Then. after this demand ceases,
the bonds will De returned 10 the owner
James r. Keene in an interview denying that
he had been seniue Southern Pacific stock said
yesterday:
Money should he IN demand little while 70
r7n,a the Crops there Is lots or money all over
the country to use The farmers were never be
fore so rich ntheir products They were never SO
much out of debt before. and they never betore
had so much money IN their local banks They
have only the weather 20 worry about Just now,
and the weather ought to he all right An early
frost in some sections would mean only slight re
duct{on In the surplus. can see no possioll-
~ for anv general disaster the 1902 crops, and
only see prosperity for all gre ters and distributors
In this country.