New Ulm review. (New Ulm, Brown County, Minn.) 1892-1961, 1903-04-01
10 RIE|:.H|:|JNDD[BIOFN nation
Secretary Shaw WEI Exchange Two
Per Cent. Bonds for Those Pay
ing Higher Interest.
RELIEF FOR MONEY MARKET TIE OBJECT
Inerease in Circulation Amounting
to 100000, 900 Will BE Possible
= when Banks Take Out Securities
Act Will Add Largely to supply of
Government Bonds.

Washington, March 28.-Secretary
Shaw took an Important step yester
day which has direct relation to the
relief of the money market next fall.
He has resumed the refunding opera
| tions suspended by SecretarysGage for
| reasons not entirely satisfactory at
| that time.
The present secretary of the treas
| ury, after full consultation with the
financial authorities Of New York and
elsewhere, has determined to take up
| the work of refunding the national
| debt exactly where Secretary Gage
| dropped it. The result of this will be
10 get rid of a large percentage Of the
| higher-priced government bonds and
| substitute for them two per cent.
| bonds, put on the market at premium
| of two per cent, and which are never
likely to get far above par
Inducement to Banks.
Furthermore, under the existing law,
| the circulation based on the two per
cent. bonds is taxed only at the rate of
| half a cent a year, whereas all other
| circulation is taxed twice as much as
! that s:.>',-.,.~
! The refunding of the three and four
per cent. loans, which are due in 1908
and 1907, will therefore add largely to
the available supply of government
bonds and thus furnish an inducement
to the national banks to increase their
| circulation.
| Will Prevent Stringency.
The ability of the treasury to loan
more money to the national banks UNI
| der the present law has practically
| terminate ed, first, because the available
cash balance is not any too large, and,
secondly, because the supply of govern
ment bonds is so small there is little
more inducement for the banks to re-
ceive government deposits than to is
sue circulation.
| If the secretary's plans are carried
out it will put into the hands of the
banks for basis for government de-
I posts no less sum than $3.50, 900, 900 of
| government bonds. In this way it
ought to be easy for the big national
banks to issue enough circulation to
|
next fall without producing any I'M
! usual stringency in the money market
| Bonds Outstanding. it,.
There now are outstanding total
of about $233OO0,O0O four per cent.
bonds, which are not redeemabl until
1907, and $97,ooo,ooo three per cent.
| bonds, redeemable after August 1, 1908,
| these last being all that are left of
| about twice that amount originally is
sued to pay the expenses of the war
| with Spain. ~.....
The circular issued by the secretary
of the treasury yesterday gives notice
that he will exchange two per cent.
government bonds, payable 80 years
| from April 1. 1900. for these short term
three and four per cent. bonds on the
basis already established by law.
! First Response.
Washington, March 2S.--The first re-
| Spouse to the offer of the secretary of
the treasury to refund three and four
| per cent. bonds into two per cent.
consols, was. received Friday. The ma
tional banks at Richmond, Va. an
nounced their readiness to exchange
| $6S0,000 under the secretary's offer,
| SchOOl-Teachers Convene.
! Bloomington, ILL.,, March 2s-Fifteen
hundred delegates representing 40
counties are here to attend the nine
| teenth annual convention Of the Cen
trail Illinois Teachers association. At
the general meeting addresses We're de-
| livered by Rev. F.. w. Gunsaulus, of Chi
cago, and J. w. Henninger, president of
the Western Illinois Normal school at
Macomb. ~ ee.s# II
| 8 g. Tornado in Virginia. /:
Clifton Forge, Va, March. 2S.-A tor
| nadO passed over theayicinity of Cor-