The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-09-30
Approved Municipal and other secu-
rifles VIII BE Taken Up to IS Per
Cent. of Their Par Value.
PLAN FOR MORE CIRCULATION
INVOLVING AN EXCHANGE OF BONDS
NOW DEPOSITED.
Deposits Also VIII BE Increased with
the Banks-story of Efforts to
Float n Loan in Austria.

NEW YORK, Sept. 29.-Secretary Of the
Treasury Shaw, who was in New York
tonight, has issued a statement in which
he says that the banks will hereafter not
be required to carry a reserve against gov
ernment deposits secured by government
bonds This will make available to-mor-
row over tS0,0O0.O00.
Secretary Shaw declined to discuss the
financial situation further than to say
that the treasury would cooperate as far
as possible with the banks, both East and
West, in their effort to supply the neces-
sary credit to do the unprecedented amount
of business that is taxing railroads and
steamship lines, as well as banks, TO the
utmost.
Mr.. Shaw said he had never seen any
good reason why banks holding a govern
ment deposit secured by government bonds
should be required to carry a reserve
against it. First. it is deposit not likely
to be called in a time Of stringency; and,
secondly. If called, the collateral will al
ways cell for cash and in excess of the
deposit. He has, since he took control
OF the treasury, contemplated relieving
the banks of this burden. The controller
of the currency agrees with the secretary,
and therefore il is announced that hereafter
banks will not be required to carry re-
serve against government deposits secured
by government bonds.
The treasury has on deposit with various
banks scattered throughout the country,
from Maine to California and fl om Mime
sofa TO New Orleans. in round numbers,
$3.50. 900, against which they have here
tofore been compelled to hold more than
thirty millions of gold or its equivalent.
This decision will release that much re-
serve and $300O0.0O0 additional credit.
The secretary said he would continue to
make deposits of internal revenue and mis-
cellaneous receipts (all available for that
purpose), practically 100000 per diem, as
long as the situation required. and If banks
were unable TO obtain government bonds to
secure the same he would accept the same
general class OF securities, municipal bonds,
etc. as are made available by the laws of
the several States for savings banks. BY
this IL Is not intended to loan in excess of
65 per cent. of the par value, and nothing
will be accepted that has not been panic
tried and proved salable for cash on call.
He said he should, OF course, determine
each case by itself.
The secretary further said he would ac-
cept security by each bank now holding a
government deposit. and release enough
per cent. consols to cover any increased
CURRENCY tHdl Ddilh may ucSlIc 10 ISSUE
He has recognized the position of present
conditions. and therefore early last
July began printing currency preparatory
to the needs of the banks TO handle the in
creased business of the fall trade, and has
on hand ready to be delivered aggregate
of about SIS, 100000. This can be sent out at
the probable rate of s5,0000O0 a day IL the
banks desire to substitute the other Sc
curity above designated for the release of
the consols. This step was contemplated
when some months ago he asked the banks
holding government deposits TO order addi-
tional currency printed. The secretarys
additional relief therefore may be summed
up as follows:
First, the release of practically $30OOOOOO
reserve, which will permit the banks to
increase their volume of business $780,
100000.
Second, the substitution of other security
for consols now held by the government on
condition that the same shall be used as
a basis for increased circulation, which.
IL accepted by the banks. will immediately.
increase the volume about S25, 900 600 and
will add thereto II needed.
Third, the continuation of deposits to the
limit allowed by law, accepting If neces-
sary. security other than government
bonds.
Secretary Shaw will remain in New York
tomorrow and expects to visit the finan-
cial district.