The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1902-09-20
SHAW WILL
AID BANKS
Important Move
In National
Finance.
WILL INCREASE
CIRCULATION
Heavy Demands of the West De-
creasing Balances in New
York Banks.

WASHINGTON, Sept. 13.-Seccetary
Shaw today issued the following state
ment:
Secretary Shaw has made arrange
ments to release about $4,0OO,000 of the
treasury holdings. He has had list
prepared of those national banks
throughout the country which held free
or pledged bonds at the date of their
last report and has made inquiries for
others. After making allowance for
changed conditions since last report he
expects this will release at least $4,000
000 He has sent notice to all such
that if they will send these bonds to
the treasurer of the United States in
sums of fifty thousand dollars or more
they will be designated as temporary
depositaries and the face value of the
: bonds viii be deposited with them to
the credit of the treasurer of the Unit
ed States. He has pursued this course
in preference to designating deposit
taries in the ordinary way, which COM
pe1s him to buy bonds in the market
at a large premium, thus paying out
more for the bonds than they get from
are extremely heavy at this particular
season of the year and the cash bal
ance of the treasury has gradually in
creased.
He also has decided to anticipate the
October interest, amounting to about
S4,200.00O, and with this in view, orders
have been issued to the various sub
treasures to cash such coupons as may
be presented them for payment and
the treasurer of the United States has
been instructed to mail checks for in
was decided upon some days ago and
letters and kilograms prepared for to-
day
The secretary sees in present condi-
lions no occasion for alarm. He calls
attention to the fact that there is no
evidence of a currency famine present
or prospective elsewhere than in New
York, and even there the rate is not
high for commercial paper and for
commercial paper he has the greater
solicitude. He is we'll satisfied with his
efforts TO increase circulation which he
decided upon in the early summer
when present conditions We're plainly
visible and has the presses busy pre-
pairing to meet an emergency which he
does not expect but which he thinks il
is wise to provide against. Thus fal
he has made requests only of such
banks as hold large deposits and have
very limited circulation and he is no.
asking these to increase to the maxi
mum nor to Increase at all for the
present. He does not desire to force
the banks into the market to buy bond:
at a higher rate than the government
is willing to pay. He does desire tt
make the best possible use of the fret
bonds now held by the banks. Incl
dentally he likes to encourage bank!
to hold free bonds during the dull
months, believing it is much better tt
hold bonds that yield one-half per cen
than to make call loans at two pc
cent He is therefore giving the bank
that mold these free bonds an opportu
nifty to use them to the most excellen
advantage. This method, if pursued
by the banks, would give a slight ele
ment of elasticity to our otherwise in
elastic currency system.
His position as regards circulation i
best expressed in a letter which he re
Gently wrote banker that had bee
already buying bonds and which h
has consented to make public and is a
follows:
Treasury Department, Washington
Sept. 10, 1902.
My Dear Sir:-Your letter of tn
eighth is received 1 find it well mig
impossible to convey the purport of m
request even to the banks of which
have made the request, much less t
the public.
'First-In case Of imminent DANCE
or actual disaster 1 will be compelled I
use government deposits to buy il
creased circulation.
"Second-I desire to have from fl
teen to fifty millions additional circ,
lation printed preparatory so that
can be issued in four days instead
forty.
Third will be glad to have Il
banks holding deposits arrange, if the
can to borrow the bonds
Fourth desire to send no bank Il
to the market to buy bonds at the pre-
ent time,
Fifth do not care to have t
currency issued unless conditions ma
1t well nigh imperative.
L am making no demands upon a.
bank The amount of their circulate
must be determined by their director
put inasmlch as the public holds t
sseretary of the Treasury somewh
zsSpaIsible for existing conditions
s. myself justified in using the pu
al IS ssss'as now held by various ban
,1s sasl.s.sae as l think best for the pu
81 - s:s's'a' and IN case of trouble I m
s1'ssas ssss g use these to buy incre;