The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1902-09-14
MILLIONS TO BE
TURNED LOOSE
Effort to Relieve the Financia
Situation in New York.
PLAN OF SECRETARY SHAW
WEST DEMANDS MORE MONEY
TO TRANSACT BUSINESS.
PLAN OF SECRETARY SHAW

IL AShlNb lO-Ns sept lo.-ortIctdIy
III shaw today issued the following
statement:
Secretary Shaw has made arrange
nents TO release about 81. 600 900 Of the
treasury holdings. He has had a list
prepared of those national banks
throughout the country which held free
rr pledged bonds at the date Of their
last report and has made inquiry for
others After making allowance for
changed conditions since last report, he
expects this viii release AZ least $4,000.
G00 he has sent notice 20 all such that
IL they will send these bonds to the
treasurer OF the United States in sums
OF $4,000 or more they will be desig-
mated as temporary depositaries and
the face value OF the bonds will be de-
posted with them 20 the credit Of the
treasurer Of the United states. He has
pursued this course in preference %
d-sIguating dep0sitaries In the ordinary
way. which compels them 10 buy bonds
I'm the market al a large premium, thus
having 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 balance Of the treasury
has gradually increased.
Pay Interest in Advance.
HE has also decided to anticipate
the October interest. amounting TO
about $4,000 600. and with this In view,
orders have been issued 10 the various
sub treasures to cash such coupons as
may be presented for payment. and the
treasurer Of the United States has been
instructed to mail checks for interest
on the registered bonds All this was
decided upon some days ago and letters
and kilograms prepared for today.
The secretary sees in present COndi-
tiOns no occasion for alarm. He calls
attention 10 the fact that there Is no
evidence OF A currency famine. present
err 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
Foliciiude. He Is well satisfied with his
efforts TO increase circulation which ne
decided upon i'm the early summer when
present conditions We're plainly visible,
and has the presses busy preparing 10
meet an emergency which he does not
expect, but which ne thinks IL is wise
90 provide against.
Thus far hc has made requests only
of such banks as hold large deposits
and have very limited circulation, and
he Is not asking these 10 Increase to the
maximum, nor 10 increase at all for the
present He does not desire to force
the banks into the market 90 buy bonds
at a rate higher than the government
IS willing To- pay. He does desire 10
make the best possible use Of the free
"a a.
dentaiiv ne likes 10 encourage banks
To- hold free bonds during the dun
months. believing il is much better 10
hold bonds that will Yield p per cent
than 20 make call loans at per cent
lie Is therefore giving the banks that
hold these an opportunity 20 use them
10 most excellent advantage. This
method. II pursued by the banks. would
give a slight element OF elasticity to
our otherwise nelastic currency sys-
tenn.
The Secretary's Position.
His position as regards increasing
circulation is perhaps best expressed
in a letter which he recently wrote a
banker that had already been buying
bonds. and which he has consented 10
make public. as follows
Treasury Department. Washington.
sept 10. l9O2.-My Dear Sir. Your let
Ter Of the Nth Is received. l md il
We'll nigh Impossible 70 convey the pur-
port OF my request even 10 the banks
of whom / have made the request,
much less TO the public.
'F'irst-in ease OF imminent danger
or actual disaster l viii be compelled
TO use government deposits to buy in
creased circulation.
Second desire 10 have from SIS.
100000 10 $50 OOo 900 additional circula-
tion printed preparatory, SO that il can
De issued i'm four days instead of forty.
Third viii be glad 20 have the
banks holding deposits arrange. if they
can. 10 borrow the bonds
Fourth desire 20 send no bank
into the market 10 buy bonds al the
present time.
FIFTH DO not care 10 have the
currency issued unless conditions make
u we'll nigh imperative.
4 am making no demand upon any
hank. The amount OF their circulation
must be determined by their directors.
hut inasmuch as the public holds the
secretary of the treasury somewhat re-
fponslhle Tor existing conditions.
deem myself justified In using the pub
uc funds now held by various banks on
deposit as I think best for the public
good, and i'm case Of trouble / may
think best 90 use these 20 buy increased
circulation the banks now holding
such funds having preference
Banks Complaining.
Later I'm the day the following was
given ont al the treasury department.
The New York banks are complain
ing because the unprecedented demand
800 the west is reducing their available
cash. They therefore ask that they
may Do allowed 20 so into the market.
pay Nlloooo0 for a million of bonds.
and receive from the treasury 81. coo. coo
deposit with the bonds as security.
They seem willing to do this and in
crease the reserve against this in
creased liability. Thus the banks would
decrease their available cash $3.50. GOA.
hut they would Dee drawing the inter-
est ON the bonds Instead ~ this. the
secretary IS leaning To any bank wher-
ever situated upon It's free bonds. In
this way the western demand upon the
hanks viii be relieved and they will
only have 10 protect themselves"