Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-07-15
GOVERNMENT FINANCES
National Bank Depositaries
Transferring Money
BACK TO THE TREASURY
WORKING BALANCE MUST NOT BE
BELOW 100000.
Plenty Of Money Still in Circulation,
for Much Will Go Right Back
Into Business.

National bank depesitaries throughout tho
country are today completing the transfer
to the Treasury OF the United States ot
about sli.613. 500 OF government funds de-
posted with them by Secretary Shaw two
or three years ago.
Secretary Shaw hopes that he Will not
have to make any further calls upon de-
positaries and that the balances they now
hold of government money will be left I'M
disturbed for some time. lie cannot make
any promise to that effect. however. and
says much Will depend upon how fast tie
expenditures OF the government exceed re-
ceipts in the next four or FIVE months. That
there viii be heavy excess of expendi-
lures during that period is not doubted by
treasury officials. 1t the thing
in the last fiscal year and in other years,
the practice OF disbursing officers being TO
draw heavily out OF appropriations for the
current year at the beginning. The decrease
of the working balance OF the treasury be-
low $50 100000 or $4,000 90 is not desirable.
and whenever the total gets down near those
sums Secretary Shaw must draw from
the banks some of the money placed with
them in Cnce Sans palmy days. when he
was taking In far more money than he
spent. That was in the years from 1883
down TO two years ago.
Going Behind Hand.
Since then Uncle Sam has been spending
so freely he has been having hard time
keeping within his income. In fact. he has
not been able to do so. there having been
deficits right along for two years, the ag-
gregate being about 5000 0oi. To meet
these the government has had to call on
national banks to return deposits made
with them.
To meet the first payment OF $5oO00ooo
on account OF the Panama canal, Secretary
Shaw made The first call upon the banks
early in 1894. asking them TO turn in SIS
G51,jGo by March - of that year. lie fol-
lowed that with calls payable May To- 1904,
for Sll.9619S2 and again, payable May -,
OF S9,336925, making total of SI9.312, i6i
in a period of two months.
There were no further calls until Decem-
Der last. WI en- SS,999,Uo0 was ordered pay
able January II, 1903. this being followed
By calls for the following sums: Payable
March ID. 1905, S13. $4,000, May Il. S14.1U9,-
coo; July Is. today. Sli.613.J0O, making a
further total of SOL. $50 $40. total drag on
the banks of over Sl0J,o5J,oO0 inside of six
teen months.
There VIII be left with national bank de-
positaries when all of the last call has been
paid in something like S63.Ooa,DJo of gov
eminent funds. compared with a high
water mark of nearly S11o,O00,t0o two years
ago.
Plenty of Money in Circulation.
The retirement of this much money from
business channels has not been felt in bust
ness circles. as much of it went + ght back
into business again. the treasury not be-
ing able to hold it. The canal payments
got into business channels again in a
mighty short time while the Treasury has
had to pay out the other sums brought into
its vaults.
The banks have done much toward In
cieasing circulation by using the bonds
that were held security for the deposits
as security for additional circulation. For
fourteen months there has been steady
addition to the national banking circula-
ton due to the transfer of bonds held as
security for deposits to the circulation ac-
count. The effect of the calls by Secretary
Shaw was to release the usefulness of about
S1oo,09000o of bonds and put them upon
the market which went tumblng In price
TO per cents, which were used more than
any others. from around los down to below
10i at the present time. Rather than dis
pose of their bonds on falling market the
national banks decided to use them as a
basis for increasing their circulation. This
is shown by the fact that the total circula-
ton of national banks June 30, 1895. was
Sla5 10 $685. against S449. 23J,c on the
same date year ago. showing an in
crease OF $40 asa, Ill.
A large amount of the bonds released to-
day as security for deposits that are
being returned TO the government viii
go TO the controller security for further
circulation. and the total increase In the
outstanding of national banks will be more
than $50Oc0GG0 over this time last year.
There is absolutely no disposition on the
part OF banks to retire circulation at the
present price of bonds, the maintenance OF
circulation at prevailing interest rates
bringing the better returns than the sale
of bonds and the of the cash for loans
and general business.
Construction of the Canal.
It is not believed that the banks will at
tempt to reduce their circulation for some
time hoping that the price of bonds may
advance Among informed treasury OFF,
Gals 1t is not considered likely that there
will be an upward movement in bonds for a
long time, isasmuch the government will
be compelled to issue during this winter or
early next spring bonds to carry on the con-
of the Panama canal and this
will keep the bond market well supplied.
Just how many bonds will be sold at that
time is not yet known, the determination
depending upon the best advantage 10 be
authorized the sale of $130,000,00J = per
cents. Suggestions have been made that
Congress may deem IT best TO require the
using up of deposits still with national
banks before bonds issued, but Secre-
tary Shaw and others think the bonds ought
to be sold and the canal accounts kept dis
tinct and separate from the other business
of the treasury. which is already running
behind It's receipts owing to heavy appro-
priations This is one of the several ques-
tons Congress must settle this winter. II
is estimated that the original $4,000 900 OF
can from the treasury, under which the
canal is now being dug, will be exhausted In
December or January.
Army Orders.
Mat William A Millar IT ( ratirad