Evening bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1895-1912, 1903-10-09
WHY OUR BONDS ARE
ACCEPTED.

The opinion of The Bulletin that the
favorable action of Secretary Shaw.
in admitting Hawaii's Territorial bonds
as security for national bank deposits,
Is the result of general and more lib
cral administration policy is borne out
by the Washington dispatches to the
financial papers of the East, This Ter.
ritory has been very fortunate In go.
ing TO the market at an OppOrtune
time and, although the Secretary OF
the Treasury has been good to us, he
has not as at first appeared, selected
Hawaii as the sole mark Of Admins
tration favor.
A Washington dispatch to the New
York Commercial, the leading iinan
Cial daily in New York. says:
Secretary Shaw has encoun-
tered an unusual difficulty in car
rying out his policy Of largely in
Creasing the Federal deposits in
national banks. He has found
that the bankers who wish to re.
ccive these deposits are having Sc
rious difficulty in obtaining long
term bonds Of the 2 per cent. Is
sues. which are usually furnished
as security for deposits. The same
obstacle has presented itself to
bankers wishing to increase their
issues of bank currency.
The Secretary accordingly an.
nounced today that the refunding
operations would be resumed at
once. Secretary Shaw also an.
nounced today that he will redeem
the per cent bonds maturing
February /, 1904. paying interest
to maturity. This is to increase
the volume of money in circulation
at time when the Secretary
thinks the money is especially
needed to meet the demands of
trade and commerce. Another fea.
ture OF the announcement made
today is that the banks which have
had on file with the United States
Treasurer. for thirty days or more,
per cent. bonds as security for
DllullN u'DbSlN0 WIN
TO substitute approved State and
Municipal bonds therefor, which
will be accepted at IS per cent. of
their par value.
"Of the total issue of $4,000.
00O of per cent. bonds, the
Treasurer already holds for cir
Culaion and for deposits $3.50 600.
600. The market price of the
per cent. bonds has naturally risen
sharply within the last fortnight in
view of the comparative scarcity
Of the bonds in the open market
and the demand for this class of
securities for deposit with the
United States Treasurer in eX.
change for public deposits. The
investment value of the short term
bonds of the per cent and per
cent issues Is so great that bank.
ers are not inclined to put them up
with the Treasurer as security for
. posts
. What the Secretary has done is
: Put Hawaiis bonds on the list of a
: proved State and Municipal securiti
. which he might well do in consequent
: Of our comparatively small indebte
: ness and ability to meet the ObllG
. tiOns represented in our loan bond
: And the sharp demand from the BAN
for bonds of this character is undoul
eddy the occasion for Secretary ca
ter's confidence that II will be prac
cal to reduce the rate of interest
=. the present loan.
The Bulletin confidently hopes tn
, Mr.. Carter is right in his sizing up
the situation, but there is a feelll
among conservative bankers that &
certainty of floating the loan at p
. cent should be firmly established |
fore attempts are made to drive
sharper bargain with the financiers
the East. What Hawaii wants Is I
- money at the best terms possible-b
It needs the money.