Evening star. [volume] (Washington, D.C.) 1854-1972, 1904-02-17
MONEY FOR THE CANAL
Secretary Shaw Preparing for
Panama PAYMENTS.
DRAWING FROM BANKS
ANOTHER CALL MAY BE REQUIR-
ED TO SUPPLY FUNDS.
No Plans Yet for the Bond Issue to
Yield the Needful Constyuc-
ton Money.
DRAWING FROM BANKS

A large number of national banks that
have deposits of government money are be-
ginning to return to the treasury the 70 per
cent of their deposits, which Secretary
Shaw some time ago notified them they
would have to give up Although Secretary
Shaw has not notified the banks that they
must begin paying this money in he per-
mits those that desired to do so to make
payments at once to banks that were desig-
mated in New York by him to receive the
money. Several millions of dollars have al
ready been paid into these banks and await
the draft of the Treasury Department. 1t
is expected that within a few days Score
tary Shaw will send to the banks another
circular, notifying them to make the pay
ments in New York without further delay.
When the payments are all made there
will be on deposit in ten New York banks
$3000000O of government money that Sec
retary Shaw will use in paying the first
$50 Con, 600 of expenses connected with the
Panama canal OF this total expense s4o,-
100000 will go to the Panama Canal Com
pany for its property in Panama and $lo,-
100000 to the republic of Panama for con-
cessions Exactly when the United States
will make the payment to the Panama
Canal Company and assume the property
has not been determined, inasmuch as the
canal treaty is not yet ratified, but the
fact that Secretary Shaw is getting the
money together to make the payment looks
if the transaction will not be delayed
many weeks the expectation being that
the treaty will be ratified next Tuesday
The treasury will pay from funds within
its immediate vaults the remaining S20,u00,-
009. but if this exhausts the cash balance
too much Secretary Shaw will make an
other call upon the banks for 10 per cent
of the amount of government money they
have on hand.
$13O,OOO, 1000 Still in the Banks.
At the time of the notification that 20
0f +I,.o vet, "A
the national banks of the country, about
500 in number had in their possession about
SLIGO, 100000 of government funds deposited
with them at different times. A decrease
of 100000 would leave the treasury with
$13o, 600 coo still with the banks and sub
ject to call at any time deemed necessary
wise.
The available cash balance in the treasury
proper yesterday was close to $e0WOooo,
but secretaries of the treasury have he'd
for many years that the working balance
of the big financial institution should never
fall below 500. o0,O60
The payment of $50, oe0J09o on the Pan
anna account would reduce this working
balance to $40 00o.000, and extraordinary
payments to be made this month would
further reduce the balance. The loan OF
about S5000,000 to the Louisiana purchase
exposition, which must be paid out of the
cash in the treasury this month, would
bring the cash balance down to about $780,
050,0Oe If the Panama payment is made
would not be surprising should Secretary
Shaw call upon the banks for another 10
Der cent of the total they have of the
funds of the government. This call would
bring it enough to build up the cash bal
ance.
Canal Bonds.
The expenses of constructing the canal
will not be paid from the regular income
OF the government. If the Spooner amend
ment of the last session of Congress is not
adjudged sufficient, Congress will take ac-
tjon soon after the ratification of the canal
treaty next week to provide for the issue OF
$50 600 600 = per cent bonds to furnish
money to construct the canal 1t is not ex-
pected that all the bonds will be issued at
one time. as the government viii not care
to be paving interest on a large sum of
borrowed money that Will not be in use.
The bonds will be put on the market as
the money is necessary for construction,
probably S5090,000 or $19,000,0o0 at a time.
They will be offered at the best figures
that are made for them. That they may
be made attractive to national banks as a
basis for circulation, national bank cur
rency issued upon them as security will
be required to pay only one-half of / per
cent taxation. That is the law as to the
per cent bonds now outstanding, but when
the Spooner amendment was passed this
provision was overlooked, and Secretary
Shaw has asked that circulation issued upon
the per cent canal bonds be required to
pay only one-half of 1 per cent. If this is
not done the availability of the bonds will
be curtailed and they may not bring such
good prices. The outstanding 2 per cent
bonds are now selling at lower figure than
for several years