New-York tribune., 1907-11-19
CTRRENCY RELIEF,

Every effort of public and private tnanciers
since the monetary situation became serious
has been directed toward getting more cur
rencv into circulation. II is for this purpose
that the gold importation has been earned on,
that the government funds We're put on deposit
in the banks and that the Secretary OF the
Treasury urged the bankers to issue their maxi
mum of notes. and ii is with the same object
that the two measures of relief just announced
have been adopted by the administration-the
issue of Panama bonds to the amount of Soo.-
100000 and of $1000O0O00 in short term in
terest bearing certificates. The bonds may be
made the basis Of further issues of national
bank notes and the certificates of Indebtedness
may be registered and also be deposited against
additional circulation. 1t is hoped by financial
authorities that this increase of banknotes Will
relieve the present stringency and put an end
to the necessity. throughout a great part or the
country of doing business by means OF cash
iers checks and Clearing House certificates Mt is
also apparently hoped that these short term GER
tiicates bearing per cent interest will of them
selves help TO cure the evil Of boarding by prov
ing an attractive investment to-the timorous
who have their funds in hiding. The money
which is paid for the notes will. according to
Mr. Cortelyou'S circular, be deposited by the
national government in banks throughout the
country wherever the pressure for currency is
greatest
No one can dispute the present need Tor IN
creasing temporarily the nations supply of cur
rency. The hoarders throughout the country,
whether individuals or small and isolated
country banks not enjoying the support of
Clearing House association. have withdrawn
from circulation a varonsly estimated at
from S.yOOO0OOO to S15OOo0.00O, and that def
cheney has to bc made up for the time being.
Ry providing for the issue of bonds and certih-
Gates the Treasury has done its utmost TO put
It in the power Of the banks 10 expand their
circulation and thus relieve the present Strin-
gency. If receipts for the purchase of the short
term certificates can be deposited with the
Treasury as security for additional circulation,
/ then this part of Secretary COrtelyous plan will
be more quickly available than the bond issue
for increasing the supply of national bank notes,
and promptness Is what the present situation
J calls for
1t is to be presumed that one of the reasons
/ which led to the issue Of the notes was this
! promise of quick relief Another doubtless was
! that they can be quickly retired and so will
not make lasting increase in the national
debt. Undoubtedly the eXpedient of borrowing
money when the government does not need TO
! borrow was reSorted 70 with reluctance as the
only method of enabling the banks TO take out
the needed additional circulation, and the loan
was made for as brief term as possible. This
/ borrowing when the Treasury already has
large surplus points again IN an unanswerable
| way TO the defects Of our currency system.
When, because of boarding or the seasonal eI-
pansion of business. there is a special demand
for currency we are compelled, for want Of
system adjusting itself automatically, to move
heaven and earth to get more banknOtes into
circulation And, as we pointed out before.
when the banks urged TO issue more circu-
lation. We have means for withdrawing that
additional paper when the purely temporary
demand for il boarding is always a
brief tendency. As soon as through the impOr
taton Of gold the issue OF more notes the
symptoms of financial strngency abate the
hoarder rushes back TO the bank with the Sc
creted treasure. Then comes period of abun-
dance. Reserves mount far beyond the legal
requirement. Gold flows out of the country. In
those times we have no means of retiring the
extra notes. and they contain in them the pos
sibty of IA disturbing factor.
The national administration does not regard
the eXpedients which il has adopted as per
fection They are merely the best that could he
done under our imperfect system. The Presi-
dent writes: Il have assurance that the leaders
''of the Congress are considering currency bill
| needs of the situation, and which ! believe
will be passed at an early date after Congress
| ''cOnyeneS two weeks hence" There, we trust
is the promise Of better things