The Washington herald., 1906-12-11
AAW HELPS MARKET
Relieves Money Stringency
with S20,O00,000.
TAKES HALF IN 1907 BONDS
Ten Million VIII Be Deposited in
Leading Cities and Remainder
Used in Purchase of Government Sc
curities-Says His Course Is Taken
After Consulting with Bankers.

Financial circles in washington and
other cities were gladdened late yester-
day afternoon by the announcement from
the Treasury Department that Secretary
Shaw would turn loose 0.000,000 in cur
rency, or such amount OF it as may be
needed. TO relieve the money situation at
all the principal financial centers. Ac-
cOrding 10 the programme formulated by
the Secretary slO,00o,o0o Of the amount
will be deposited in existing repositories
in New York Boston, Philadelphia, Bal
timore, New Orleans, Atlanta, Louisville,
Cincinnati. Memphis. St Louis, and Chi
cago. The Secretary further announced
that ne would buy sl0,000.000 worth Of the
bonds of 1907. which will throw into cir
culation that amount as soon as the ex-
changes can be made.
Shaw Issues Statement.
In connection with the announcement
of relief to the banks, Secretary Shaw
made the following statement:
7 have received in the last ten days
an unusually large number of letters from
business men representing all sections Of
the country complaining Of the eXtraor-
dinarily high rates Of interest l have
conferred during the same period, by let
ter or personally. with d large number Of
bankers scattered through the South and
Middle West as well as in the East I
have to-day conferred with the commit
tee Of the American Bankers Association
now in session in the city. These gentle
men represent Chicago, St Louis, New
Orleans, Atlanta, Pittsburg, indianapolis.
Des Moines. and other cities. From the
best information I can get / think the
following describes the situation fairly
we'll:
Our blessings are the real cause Of the
actual stringency in money recognized
everywhere An unusually large crop and
uneXampled industrial activity have Gre
ated an unprecedented demand for
money. The world is everywhere pros
porous, and money is in great demand
throughout Europe as well as in the
United States. We never had such q
volume of credits, and they are based on
an unequaled volume of assets The
manufacturers Of cotton are buying that
staple by the trainload The cotton
planter, unlike the Western farmer. de-
mands actual cash. and he carries il
home in his pocket.
Farmers raid in Checks.
The Western farmer is paid in checks
which he deposits in the bank to his
credit. and therefore does not absorb
actual money, as does the cotton planter.
This money should be returned to the
banks when the planter settles with his
merchant soon after the first of January.
but between now and then the cotton
Consuming country, as we'll as the cotton
producing country, is short of money.
New England has sent millions to the
South, and the manufacturers of cotton
throughout the South have exhausted the
capacity of local banks and are trying
10 borrow elsewhere. There is no occa-
sion for alarm. but I believe there is &C.
casion for relief This I have decided
20 grant in the following manner. 1 will
deposit ten million dollars in existing de-
positories in the cities designated below.
to be secured by bonds acceptable for
savings bank investments under the laws
of New York and Massachusetts. taken
at 90 per. cent of their value: these
deposits 10 be returned one-half on the
Goth Of January and the remainder on the
1st Of February
i viii also buy ten million Of the bonds
OF 1907 at the following prices. Regis
tered bonds. interest at 101, and coupon
bonGs 1t l02. In the event that the bonds
purchased are now held as security for
government deposits, security of the char
acter above indicated will be accepted I'm
lieu thereof
The deposits viii be made as follows.
New York and New Orleans, 1850. 00l
each, Boston, Philadelphia. Baltimore,
az 1 errfe m a0lr
Cincinnati, Louisville, Atlanta. and Mem
uhis S-nn nna nach