Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1903-02-25
Provides For the Safeguarding
of Government Securities
By National Banks
BILL gMsoDIEs sAAw's IDEA
It is Framed Along the Lines Pursued
by Him Last Fall in Relieving the
Money strnsency and Should Right
Iy Bear His Manufactures of the
Bill.

Washington, Feb. 25.-1ndications
point to the passage of the bill intro
authorizing national banks which are
repositories for government funds, to
deposit for the safeguarding of the
government securities other than
United States bonds.
This bill is framed upon precisely the
lines suggested by Secretary Shaw in
his annual report and along the lines
pursued by him last fall at the time
he released all told approximately
s100,oo0,e00 circulation at q moment
when the need of the cash was very
urgent.
phe bill which ought TO and would,
IL ii were possible. bear the title of
The Shaw BILL Is 8 vastly more inn
portant and far reaching n,earsure than
the general public may imagine. 1t is
a business proposition, a new move. a
scheme, practical Shaw method OF
more the bill is analysed the more one
becomes impressed with the sound bus
mess sense embodied in it's provisions.
The most important feature OF the
hill is the interest charge OF one and
oneh half per cent upon government
funds in the hands of banks AT the
present time there is upon deposit with
the banks nearly s150,000.000 of gov
eminent money, and the government
does not and has not realized a cent
of interest upon this vast sum. neither
can it realize cent under the exist
ing law.
OF course. the government pays In
terest upon its bonded debt, and at the
same time a sum of money that IL APP
piled upon the debt would reduce the
total very materially. lies in the var
ious banks, yielding the government
nothing. Under the plan of Secretary
Shaw, while the fund held in reserve
by banks would not apply on the bonds
ed debt, the interest derived from this
money would very nearly pay the in
terest upon a similar proportion Of the
government debt. In other words one
hand would nearly wash the other.
With the deposits of treasury funds
in national banks and yielding liz per
cent, and with legal authority to de-
post the receipts from customs with
banks. the United States would be en-
abled and justified In maintaining large
balances in national banks. and eS-
pecially when the condition OF the mar
the money Of the country
81 l,ait, lid
up until the secretary OF the treas
ury deemed it wise to increase the cir
culatfon by purchasing bonds.
The plan of Secretary Shaw meets
the demand exactly, and is simply the
carrying into effect in the United
States treasury of perfectly safe and
methods employed in all
lines of business. Heretofore, as stated.
when money became tight the secretary
OF the treasury has been compelled to
resort to the purchase of bonds to let
loose cash. 1t is admitted on all sides
that this is to say the least a question
able expediency for several reasons. In
the first place 1t has a tendency to re-
duce the stock OF bonds to point where
business interests feel the effect in an
manner. In the second place
the secretary is at the mercy OF the
holders of bonds: his necessity is their
and the government is
to pay higher price for the
bonds under such conditions than 1t
would ordinarily.
The feature of the proposed law ia
the secretary to accept
state and city bonds as secur-
ity for deposits is "a very handsome en-
dorsement Of Secretary Shaw's action
the commercial world by boldly taking
the financial situation by the horns and
doing the very thing that congress now
proposes to specifically authorize him to
do. as stated above. Secretary Shaw
believes that under this feature 1t might
be possible to loosen up from $50.000,00O
to s6O,OO0,0O0, and that amount Of
available cash would put the market on
easy street for considerable period Of
time.
Secretary Shaw has not taken occas-
ion to employ press agent In exploits
ing his accomplishment of last fall: on
the contrary, at that time and subse-
quently he has sought to minimize the
star part he played in that performance,
one scene of which approached finan-
cial tragedy. The cold facts have Leak
ed out. however, and they are calculat-
ed to make the man of business con-
template the fall of 1902 with mingled
feelings of horror and congratulation.
A gentlemen whose knowledge of
finance and commercial and industrial
conditions is such as to give his state |
ments the weight of authority made
the following statement few days
since, in the presence Of number of
high public officials in Washington, rel
alive to the financial furry last fall:
fortunately the public at large was
not aware of the extreme gravity of the
financial situation, else 1t would not
have been possible to have weathered
the storm. was a witness to the panic
Of 1873 and of 1893, but firmly believe
that but for the prompt and energetic
and l might say unprecedented (be-
cause no other secretary of the treasury
ever exercised his power to such an eX-
taptA action of Secretary Shaw, the |