Audubon Republican. [volume] (Audubon, Iowa) 1894-1925, 1903-10-01
SHAW STARTLES
MONEY BROKERS
Secretary Of Treasury Orders
Resumption Of Refunding
Operations.
uPsETs THE CORNER IN BONDS
Has $4,000 900 at His Command With
Which to Relieve Any stringency
That May Occur in the Financial
FieId-Funds to Move Crops.

Washington dispatch: Secretary
Shaw took the financial world by sur
prise and frustrated the plans of Wall
street brokers who have been engaged
in forcing up the price of per cent
bonds, and who are responsible for the
banks retiring a large amount of cir
culation, thus making money scarce
and increasing the interest rates.
Without warning Secretary Shaw
announced that ne had decided to re-
sumo refun5.ng operations for the
purpose of preventing financial strin-
gency aid to furnish supply of cur
rency which will enable the CONNER
cial world to secure money at reason
able rates to carry on business opera
tons. Owing to the scarcity Of 2 per
cent bonds, both for circulation and
the security of the government depos-
its, he will resume refunding opera.
tons to the extent of $20,O00,000 and
he viii redeem the per cent bonds
maturing Feb. 1, 1904, paying the in
terest to maturity.
Increases Circulation.
The effect of this action will be to
place In circulation about $4,000, 900,
which, in the opinion Of treasury Off
Gals, win prevent money stringency
during the crop moving season. The
total value of the per cent bonds in
the hands of owners is approximately
$2O,00O,0OO, and this, together with the
refunding of 10000, 900 in per cents.
brings the total to $4,000 900. Secre-
tary Shaw already has created a fund
OF S40,O00,000 from the internal reve-
nue. receipts to be placed in govern.
ment repositories if there are signs of
money squeeze. Therefore, when
these bonds are redeemed, $50, 900 900
will be put In circulation, which will
make money easy and keep interest
charges within reasonable bounds. If
more funds are needed for this pur-
pose the administration will provide
them.
Breaks Up Bond Corner.
1t was learned that certain brokers
an New York and other large cities
have been making contracts with
some banks for the delivery of per
cent bonds. In order to deliver these
bonds the banks retired some of their
circulation, which action was partic-
ularly Objectionable at this time, when
there is strong demand for money.
The decision to refund will Illustrate
the plans Of the brokers, and will eth
er decrease the price of 2 per cents,
which are abnormally high because of
the strong demand for them, or in
crease the price of and per cents,
which are low. 1t Is quite probable
the effect will be to reduce the price
of 2 per cents. Another reason is
the wholesome effect it will have on
the commercial and industrial world.
1t is feared IL money should become
scarce and a consequent rise in inter
est rates follow, this would have
disastrous effect on the business world
and cause partial cessation of build
ing operations and the postponement
of the Inauguration of new enter
prises.
Security for Circulation.
OF the total issue of s517 900 900 2
per cent bonds, the treasurer already
holds for circulation and for deposits
480,000.000. Formal instructions to
several subtreasuries authorizing
them to redeem the bonds on presen-
tation have been issued. The banks
that have had on file with the treas
urer for thirty days or more the S
per cent bonds as security for public
deposits will be permitted to substi-
tute approved state and municipal
bonds therefor, which will be accepted
at rs per cent of their par value.