The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-03-03
SHAW AIDS MONEY MARKET.
WILL DEPOSIT S1O,OOO,OOO HERE
AND IN OTHER CITIES.

DeahN van ~ ehht -
Money About July lO-Ruling That
Satisfactory Bonds" win he Accepted
May Help Prices OF City Securities.
WASHINGTON, March I'm order to meet
the stringent money conditions, the Secre-
tary OF the Treasury announced late his
afternoon that he would Immediately
deposit $40, 900, 900 OF Government funds
In depository banks in several cities. The
deposits will be placed in banks which are
already oustodians of Government funds,
and no new repositories will be designated.
1t is proposed t. withdraw these de-
posts next summer when the demand for
a large volume of currency will probably
be much less than 1t Is at present, 30 that
the Government may be prepared for a
further artificial expansion Of the circulating
medium; II need be, when the fall crop
moving season arrives.
The following notice was issued by Score
tary Shaw:
SIN the month Of February Just closed
the Treasury Department locked up about
$40, 0OO, 900, four and a half millions by
excess Of Government receipts over OK
penditures and five millions by excess OF
deposits OF lawful money for redemption
Of national bank circulation over n above
the actual redemption. For this reason
the Secretary Of the Treasury announced
this evening that he would at once deposit
$40, 900 900 Of public funds In existing de-
pository banks. These deposits will be
made entirely in important centres, namely,
New York, Boston, Philadelphia, Balti-
more, Chicago, st. Louis and New Orleans.
@The deposits will be temporary only
and depository banks receiving them will
be called upon to return the same on or
about July 10. The deposit being Of a
temporary character, the Department will
accept as security satisfactory bonds on a
basis Of 90 per cent. Of their value
The news that Secretary Shaw had de-
cided to deposit 100000 in depository
banks came as a surprise to the greater
part of the banking community. During
the period OF money stringenoy last fall
and at the time that call money touched
100 just after Christmas efforts we're made
to induce Secretary Shaw to relieve the
situation by deposits Of Government funds,
but he said at the time that no legitimate
interest appeared to suffer for lack of
credit, and 80 far as he could see no relief
was required. As call money ranged
from 4 to 0 per cent. yesterday and time
money was 81 per cent, q large number
of bankers said that they could see no
reason for deposits at this time.
Secretary Shaw gives as n reason for
the deposit the locking up in the Treasury
in February of IS 100000 by excess OF de-
posits Of lawful money for redemption Of
national bank circulation over and above
the actual redemption.
The March circular of the National City
Bank, issued yesterday afternoon, says
that the deposit Of 81, 14s 900 Of legal tenders
with the Treasury in February is the chief
factor in the hrmness Of the money market,
especially as this extraordinary total was
paid in almost entirely by the New York
city banks and wholly during the last week,
when the fear of another money stringency
has been felt.
The reason given for the unusual deposit
of legal tenders, far exceeding the s 5000 900
monthly limit, which ordinarily applies in
the case of the retirement Of national bank
notes, is the fact that the charters Of $50
national banks expired on February "a,
1903, and under the law the banks, to renew
their charters, must within three years
retire all the circulation issued under the
old charters. 1t thus happened that on
February "a some $50 banks we're compelled
to deposit legal tenders to an amount equal
to the outstanding notes issued under the
old charters.
Some bankers were of the opinion yes
terday that the money situation called for
no Treasury relief. The point was made
that increasing firmness OF money was al
most certain to bring gold from Europe
before long. Stock market liquidation,
these bankers commended, was the only safe
prevention OF a possible stTingency. Gov
eminent deposits, they said, would only
increase the activity of spectators and
would have no more permanent beneficial
effect upon the general business situation
than would the transfer Of funds between
members Of a firm have In enla rging the
wealth Of the firm,
On the other hand nearly every one
seemed to believe that the deposits. al
though a comparatively small sum, would
have a favorable effect by inducing the
belief hat the Treasury stands ready to
furnish relief to the needs OF Wall Street.
1t was also pointed out that although the
entire sum would not be deposited in this
city, nearly all would find its way here.
The Secretary's statement that the deposit
being OF a temporary character only salts
factory bonds" will be accepted as security
was taken to mean that New York city
bonds would be acceptable. Such being
the cdse, the effect upon the city bonds
will be Of an invigorating character, ac-
to one Of the leading bond experts
in the Street. Most OF the local banks, it
is believed, will deposit city bonds.
The Seoretary's action follows almost
upon the announcement that
he Treasury had a surplus on Wednesday, |
for the first time In more than a year. On
there was an excess of receipts
expenditures Of 81, 1902 ,002, as COM
with a deficit Of S25, 4O5, 53S on the
day in 1905.