The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1902-09-23
SHAW WILL
AID BANKS
important Move
In National
Finance.

Shaw today issued the following state
ment:
Secretary Shaw has made arrange
ments to release about 100000 of the
treasury holdings. lie has had list
prepared of those national banks
throughout the country which held free
or pledged bonds at the date of their
last report ard has made inquiries for
others. After making allowance for
changed conditions since last report he
expects this will release at least $4,000.
600 lie 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
depositarics and the face value of the
bonds Will 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
pels him to buy bonds in the market
at a large premium, thus paying out
more for the bonds than they get from
the government. The customs receipts
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
81, 200, 600 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 Tor in
tercst on the registered bonds. All this
was decided upon some Gays 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 it
is wise to provide against. Thus far
he has made requests only of such
banks as hold large deposits and have
very limited circulation and he is not
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 bonds
at higher rate than the government
is willing to pay. He does desire to
make the best possible use of the free
bonds now held by the banks. Incl
dentally he likes to encourage banks
to hold free bonds during the dull
months, believing it is much better to
hold bonds that yield one-half per cent
than to make call loans at two per
cent. He is therefore giving the banks
that hold these free bonds an opportu-
nifty to use them to the most excellent
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 is
best expressed in a letter which he re-
Gently wrote a banker that had been
already buying bonds and which he
has consented to make public and is as
follows:
Treasury Department, Washington,
Sept. TO- 1902.
My Dear Sir:-Your letter of the
eighth is received. / find it well nigh
impossible to convey the purport of my
request even to the banks Of which |
have made the request, much less to
the public
"First-In case of imminent danger
or actual disaster | will be compelled to
use government deposits to buy in
creased circulation.
"Second-I desire to have from fif-
teen to fifty millions additional circu-
latioI printed preparatory SO that it
can be issued in four days instead of
forty.
Third will be glad to have the
banks holding deposits arrange, If they
can to borrow the bonds.
FOURTH desire to send no bank in
to the market to buy bonds at the pres
ent time.
Fifth do not care to have the
currency issued unless conditions make
it well nigh imperative.
Il am making no demands upon any
bank The amount Of their circulate
must be determined by their directors,
but inasmLch as the public holds the
Secretary of the Treasury somewhat
responsible for existing conditions
deem myself justified in using the pub
tic funds now held by various banks
on deposit as / think best for the pub
lie good, and in case of trouble | may
think best to use these to buy increas.
ed circulation, the banks now holding
such funds having preference"
Later in the day the following was
given out at the Treasury Department:
The New York banks are complain
ing because the unprecedented demand
in the west is reducing their available
cash They therefore ask that they
may be permitted to go into the mar
ket. pay sl.l00,000 for a million of bonds
and receive from the treasury a mil
lion deposit with the bonds as security.
They seem willing to do this and in