Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-10-23
SHAW PLANS To
MAKE GOLD EASY
WITH BANK NOTES
Wall Street Approves of His
New Project.
MAY RELIEVE SITUATION
Special Deposits to Facilitate Imports
Will Be Discontinued.
DIFFICULTIES IN THE WAY
There May be Some Trouble Because
Some Of the Banks Have Not
Notes Enough.
Special Deposits to Facilitate Imports
Will Be Discontinued.
DIFFICULTIES IN THE WAY
Special Dispatch to The Star.

Special Dispatch to The Star
NEW YORK, Ocotber 23.-The
plan of Secretary Shaw of the
Treasury to increase note circula-
ton by $IS,ooo,ooo, as announced
last night after his arrival here
from Washington, was apparently
well received in Wall street today,
and there is a much easier feeling
in regard to the monetary situation.
In addition, he gave notice that
after today the special deposits to
facilitate gold imports would be
discontinued.
Secretary Shaw came here to
consider the disturbance in the
money market caused by the adj
vance in the discount rate of the
Bank Of England last week.
| Secretary of the Treasury Leslie M.
Shaw, who went to New York yesterday to
! consider the money market disturbance
caused by the Bank of England's unex-
pected increase of its rate of discount to
6 per cent. announced last night a plan
| intended to increase available circulat on
by S1S000 600. and at the same time gave
notice that after today the special de-
I posits against gold engagements abroad
| will be discontinued.
! Secretary Shaws plan for an increase
| in circulation provides for the subst tuition
to the extent of SIS 100000 of approved
securities, other that governments, for
government bonds now pledged security
for government deposits. 1t is provided
that the bonds SO released shall immediate
ly be used to take out additioal national
bank circulation.
Any bank which profits by this offer
must agree to retire the circulation OBJ
tanned In this way some time between
March Is and August 10 next The banks
when taking out the circulation will be
required to make application for its
tirement and the order per cent OF
| retirement from month to month will be
determined by the Treasury Department.
Provision an Innovation.
This latter provision Is an innovation.
1t limits the life of this additional cur
rency to a fixed number of months. By
making these SlS.O0 900 OF banknotes i'm
| mediately available and by providing for
their gradual retirement during the spring
and summer months. Secretary Shaw ex-
poets to demonstrate in limited form the
| benefits of an elastic currency. That the
Secretary has such an object in view Is
specially interesting, taken in conjunction
| with the statement from Washington that
| President Roosevelt, after a conference
with Secretary Shaw, has decided to in
clude in his annual message to Congress
| a recommendation in favor of elastic
currency.
| Special Deposits.
In announcing the discontinuance of spe-
| cial deposits against gold imports Secre-
/ tary Shaw said that the gold Imports had
exceeded his expectations, and he believed
that for the present America had quite its
share of the precious metal. He had no
disposition he said, to disturb conditions
| in Europe by q continuation of that method
| of relief for the money market in this
country
An officer Of one of the leading national
banks said last night that, while under
Secretary Shaw's plan the whole $lS,003,-
Coo of new circulation may not De taken
out he thought very large part OF II Will
be- Some difficulty may be encountered by
reason of some of the banks not having
sufficient notes already printed, but this
will be overcome, in large measure at least,
by the willingness Of the Secretary to per-
NIT the assignment Of bonds recessed under
his plan to other banks than those now
holding them.
Plan Brings Results.
In any event the plan will bring good re-
suits this official thought, as an object les
son in elastic currency. He thought that
the working out of the plan would serve to
demonstrate to Congress the advantage
that would follow the adoption of a scheme
of elastic currency. Congress may also be
Influenced by this experiment to repeal the
law which now limits the retirement of
national bank circulation to $3,000,0OO. In
deed, unless this law were repealed il would
not be possible between March Is and Au-
gust 10 next, a period of five months, to
retire the whole $4,000, 600 Of circulation
that may be made available under the rul-
ing announced yesterday.
This official said that his own bank would
certainly take out all the circulation to
which 1t may be entitled under this plan,
and he thought that most other banks
holding government deposits would take
their share Of the new circulation or would
find other banks to which to assign the
government bonds in case they cannot, for
any reason, take the additional circulation
themselves. 1t was pointed out that al
most any bank would have in its posses
sion, or could easily obtain. acceptable
bonds TO offer as substitutes for the gov
eminent bonds which they have pledged as
security for government deposits
Reports that Secretary Shaw meant to
take some measure to increase the funds
available in the money market were cur
rent in Wall street all day yesterday. Var1-
Gus plans that he might adopt were sug-
gested, including the prepayment of the
government bonds which mature next year,
but the novel plan announced by the Sec
rotary last evening had not been fore
Swallowed.
Wall street took more hopeful view of
the monetary situation yesterday, and prices
q stocks recovared All --~-a7s nd cloe-