The Birmingham age-herald., 1902-09-30
Secretary Shaw Takes Step to Relieve Present Stfingency
 in the Money Market
THIS MAKES $3O,OOO,OOO
 OR MORE AVAILABLE TODAY
He Will Not Discuss the Financial Situation, But Says the Treasury Will Cooperate With Banks
 In Supplying Credit.

New York, September 29.-Seeretary of the Treasury Shaw, who was in New York tonight, has issued statement say ing that the banks will hereafter not be required to carry reserve against gov ernment deposits secured by government bonds This will make available tomor- row over sSO,oOOOO0.
 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 rail- roads 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 re- serve against 1t.
 First, it is a deposit not likely to be called in time of stringency, and sec ond if called the collateral will always sell for cash and in excess of the depos' He has since he took control of the treas- ury contemplated relieving the banks of this burden.
 Comptroller Agrees With Shaw. The comptroller of the currency agrees with the secretary, and therefore 1t Is l announced that hereafter banks will not be required to carry a reserve against government deposits secured by govern ment bonds.
 The treasury has on deposit with vari- ous banks scattered throughout the coun- try from Maine to California and from Minnesota to New Orleans, in round numbers. N30000,000 against which they have heretofore been compelled to hold more than $30000,000 of gold or its equiva- lent. This decision will release that much reserve and $500 900 additional credit.
 The secretary said he would continue to make deposits of internal revenue and miscellaneous receipts Gall available for that purpose), practically s500,000 per day, long as the situation required. and If banks were unable to secure government bonds to secure the same he would ac- cept the same general class of securities, municipal bonds etc.. as are made avail able by the laws of several states for saving banks. By this it 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 sal able for cash on call. He said he should determine each case by itself.
 Will Cover Currency Issued.
 The secretary further said he would ac- cept securities of the class described above for a portion of the deposit held by each bank now holding a government deposit, and release enough per cent consos to cover any increased currency that the bank may desire to issue. He has recognized the possibility of present condltoins, and therefore as early as last July commenced printing currency pre- paratory to the needs of the banks to handle the increased business of the fall trade and has on hand ready to be deliv- cred an aggregate of about $25, 5,000 900. This can be sent out at the probable rate of $5, 900 900 a day if the banks desire to substitute the other security above designated for the release of the con- soIs. This step was contemplated when some months ago he asked the banks holding government deposits to order ad- ditional currency printed.
 The secretarys additional relief there fore may be summed up as follows:
 First-The release of practically s30,- OO1,0o0 reserve which will permit the banks to increase their volume of busi- ness $130 100000
 Second-The substitution of ether se- curity for consols now held by the gov ernment on condition that the same shall be used as a basis for increased circu- lation, which if accepted by the banks, will immediately increase the volume about s25OO0,OO0 and will add thereto if needed
 Third-The continuation of deposits to the limit allowed by the law. accepting if necessary security other than govern ment bonds.
 Secretary Shaw will remain in New York tomorrow and expects to visit the financial district.