Los Angeles herald., 1906-12-11
SHAW TO RELIEVE
MONEY MARKET
WILL DEPOSIT TEN MILLIONS
IN BANKS
Says Prosperity Is at Bottom OF the
Trouble-Gives Explanation-WtIl
Also Purchase Ten Million
Dollars Of 1907 Bonds
nv Associated Press.


WASHINGTON, Dec. 10.-secretary
Shaw had an interview today with the
bankers committee now in session in
this city. and later in the day made
the following announcement:
"I have received in the last ten days
an unusually large number Of letters
from business men representing all sec
tions of the country complaining of the
extraordinary high rate of interest l
have conferred during the same period
by letter or personally with a large
number of bankers scattered through
the south and middle west as well as
in the east. 1 have today conferred
with the committee of the American
Bankers association now in session in
this city. These gentlemen represent
Chicago, New Orleons, Atlanta, Pitts
burg, Indianapolis, Des Moines and
other cities. From the best information
can get / think the following describes
the situation fairly well:
Prosperity Is Responsible
"Our blessings are the real cause OF
the actual stringency in money recog-
niZed everywhere. An unusually large
crop and unexampled industrial activ-
mand for money. The world is every
where prosperous and money Is in great
demand throughout Europe as we'll as
in the United States.
I'VE never had such a volume of
credits, and they are based upon an un-
euualed volume of assets. The manu-
facturers of cotton are buying that sta
pie by the trainload The cotton plant
er, unlike the western farmer, demands
actual cash and he carries it home In
his pocket.
"The western farmer is paid in
checks. which he deposits in the bank
to his credit. and therefore he does not
absorb actual money as does the cotton
PLANTER This money should be re-
turned to the banks when the planter
settles with his merchant soon after
the first of January, but between now
and then the cotton consuming coun-
tries, as we'll as the cotton producing
country, IS short of money.
Believes Occasion for Relief
New England has sent millions to
the south, and the manufacturers of
cotton throughout the south have ex-
hausted the capacity of local banks
and are trying to borrow elsewhere.
There is no occasion for alarm, but 1
believe there is occasion for relief. This
1 have decided to grant in the following
manner:
IT will deposit ten million dollars in
existing depositaries in the cities desig-
mated below, to be secured by bonds
acceptable for savings bank invest
ments under the laws of New York and
Massachusetts,, taken at 80 per cent of
their value; these deposits to be re-
turned one-half on the goth Of January
and the remainder on the first of Feb
ruary.
'I will also buy ten millions of the
bonds Of 1907 at the following prices:
Registered bonds, exinterest, at 101,
and coupon bonds at 102. In the event
that the bonds purchased are now held
as security for government deposits,
security OF the character above indi-
Gated will be accepted in lieu thereof
Not more than S1,0O0,O00 worth, how
ever will be purchased from any single
institution under these conditions.
"The deposits will be made as fol-
lows: New York and New Orleans
81, 5000 each; Boston, Philadelphia
Baltimore, Chicago and st. Louis, ST.
900, 900 each; Cincinnati, Louisville, At
lanta and Memphis, 100000"