The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1902-10-08
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A fev days ago the. Advertiser pre-
scented plan for the releasing of terri
torial funds to the various banks of
Honolulu with Territorial bond security
in return therefor. as means of keep
ing the money in general circulation.
This paper also advocated the plan
with a view to prevent large accumula-
tions OF public revenues in the Treas
ury vaults
TIVE bankers were interviewed Ses-
terday on the feasibility of the plan,
and each tentatively agreed that legis-
iation on the question would be wise
government could afford to deposit its
funds with the banks on fixed terms, or
periods of time, rather than on call.
If the government deposited it's funds
subject to cali, the banks could not at
tempt to carry the deposits as the diff
ficulty would lie IN collecting money
from those who had borrowed the same
on approved securities. Each banker
dSE6C0 tuGL (iCIG WOQ1Q DC III QucSItO11
as to the character and stability of the
securities deposited in lieu of the cash
but much depended upon the ability of
the borrower to make payments on call.
sPALDING ON SECURITIES.
E. l. spalding. cashier of Claus
spreckels & Co.. bankers, of this city
said:
"No deposits of public moneys should
be made in bank without unuues-
tionably good security. AS to the ma
ture of the security 1 would say only
United States government and our pres
ent Territorial bonds should be eonsid-
cred. Real estate and sugar stock
values fiuctu&te often, but 1 say this
without rejecting at all against such
securities.
Il do not wish to reflect upon plan
tation bonds or local securities in any
way, but while our plantation bonds are
well secured and are perfectly sound and
cur real estate and better class of plan
tation stocks are suitably secured for
commercial loans. it would undoubtedly
be advisable for the Territory to imi-
tate the example of the Federal gov
ernment in requiring government or
territorial bonds as security for the
deposit of any public funds with the
banks,
II do not think it would be sound poI-
icy for the Territory to accept any
other than government bonds. I do not
think the United States would conten-
plate any deposits, that is Federal de-
posits, on any other terms. The Fed
eral laws require that the issue of Ma
tional Banks should be secured by de-
posits of United States government
bonds.
Now. the idea that the deposits OF
this amount of money with private
banks would release it for circulation,
perhaps would not work to the extent
that the advocates of the measure an
ticipate. For instance, large sums of
this money would be required by the
government for it's use in a compara-
lively short time. and it would be diff
cult for the banks to loan the money
out in such a way that it could actual
IL put il into circulation on satisfactory
security so that they could be assured
of calling it in as required by the needs
CT the government.
..Of course, If arrangements could be
made by which the government could
agree to deposit for fixed terms in the
banks they might find an outlet for the
money. Or at least, a large part of it.
Otherwise It would simply be a choice
between the treasury and banks as a
safe depository.
Conditions in the Territory to make
such a change in the methods of de-
posting would have 10 be normal,
which they are not at present, The diff
ficuIties of placing large amounts Of
money satisfactorily on short times are
great at present. As a general thing
the security would be undoubted, but
the ability of the person to pay up
would be the next question. That
would be the only way it could be done
to protect the bank.
AS the Government is at present