New-York tribune., 1902-03-15
BOND PURCHASES STOPPED.
SECRETARY SHAW ANNOUNCES HIS
POLICY
TO CONTROL THE TREASURY SURPLUS BY
DISTRIBUTING IT AMONG Ma
TIONAL BANKS.
[BY TELEGRAPH TO THE TRIBUNE.

[BY TELEGRAPH TO THE TRIBUNEl
Washington March 14-In accordance with pre-
dictions made last night in these dispatches the
Secretary of the Treasury issued instructions to-
day TO discontinue the purchase of United States
bonds at the present high market prices. When
inquiries made about the change in the policy
of the Treasury the following official statement
issued
Will discontinue for the ptesent the purchase Of
I'M s states O9nds OF me me per oc cent oan OF 1s
loan OF 1@S-lS, and the per cent loan OF 1925.
the to & hs a The n
believes that the price of bonds IS unreasonably
permanently in the market stimulates and helps
to maintain this price to the prejudice of national
bank circulation. 1t is well known fact that the
banks are retiring circulation rapidly poss-
bonds now on deposit at present prices, or for the
purpose OF using them with the Treasury as Sc
ernment deposits the Secretary is disposed to dis
cTmnate in favor of such banks as maintain their
culation
This action on the part Of Secretary Shaw who
had previously discussed the proposition at some
length with President Roosevelt to-day's Cabi-
net meeting, is regarded a strong indication that
the administration believes the best manner in
which to control the surplus fund is by distribut
try. In the last few weeks the tendency to pur
IIat MT. ShaW since becoming Secretary has in
creased by twenty-five the number of national
doubtedIy the number viii be still further in
creased within the next six months. although it is
new designations in March The Treasury Depart
ment at present has surplus of about 1894 100000
OF which Nl70000OO is deposited in national
nanKs. According to the theory of officials advo-
T hePe s bou Sly ors 5Rs
id Wmch might be distributed and then $5oGeO,ooo
working balance But there is no likelihood of the
amount unless some extraordinary stringency in
the money market should occur Unexpectedly. Sec
of depositaries and make deposits on receipt Of an
1ont amount OF United States securities each
44u1re II. Secretary Gage began the purchase of
1901 bought total Of Sls55 go for 5e Witch % the
Treasury paid sl6257,92S The bond purchases IN the
for which the Disbursements were s65,475625. The
TO" attern9on may be so large as to run the total
up considerable amount. The amount available
dbo dhs sum has nearly been REACHED, but any pur-
Gay B Dond purchases amounted 10 $lSlS,0J0
BANKS RETIRING CIRCULATION.
bonds, which has caused the withdrawal Of
tional bank note securities. 1t may be said that
never before in the history OF the country have
these transactions been large as in the last six
or eight months In the spring of 1881 while the
funding bill was under discussion in Congress. in
fifteen days 40 banks surrendered nearly S9OOoOOO
Of their circulation by depositing lawful money for
Its retirement under Section OF the OF June 90
4o'1- w men the IunQlnR Dill was vetoed the banks
again applied for circulation and in some instances
on the bonds which they had Just withdrawn. To
avoid the possibility of another such run on the
security deposits, Section OF the OF June r.
1852, extending the national bank charters twenty
bank circulation to 50 900, 600 a month The efficacy
OF this provision, which is still enforced. can be
easily seen at the present time. Bonds called by
the secretary OF the Treasury for redemption were
however. excepted from the operations Of Section
y. Banks making deposits for the withdrawal OF
CIRCULATION We're moreover not permitted to re-
celVe any Increase Of circulation for six months
from the time the deposits for withdrawal we're
made The limit Of $3000.000 a month was reached
by the tenders in September 1885, the first time
after 1t was fixed. and again every successive
on IN the amounts offered The bonds released by
these deposits were withdrawn for sale. and the
whole movement appeared 10 be prompted bv the
desire TO realize the high premiums that were paid
The legal monthly limit Of 100000 was twice
reached in the fiscal 1900 IN the months OF De
cember and March IN March the limit was
reached about the middle Of the month. In addi-
uon offers were filed in the remainder of March 10
surrender notes In amount sufficient to cover the
April limit. These accepted offers were not an
aValled Of and the deposits made did not reach the
yember, still continues. and applications are being
filed for May. e
The amounts withdrawn within the last seven
months are follows:
November ........ 50 999 9O5 January - 60 Aso o4a
December 2999 075 February .... 2 asa 40
Applied for:
March ..... 81. 992. 600 May aOo