Los Angeles herald., 1907-11-19
CESSATION OF
GOLD IMPORTS
is EXPECTED
GOVERNMENT SCRIP HAS A
MARKED EFFECT
REGARD FOR THE SITUATION IN
EUROPE A FACTOR
Bonds May Be Observation-Disclosures
Of cnsh In Banks Probability.
Receipts to Be Immediately
Available
BY Associated Press.

by Associated Press.
NEW YORK, Nov. dissatisfaction was
general in banking circles today because
Of the governments plan of relief to the
market by the issue of 900 Panama
bonds and $100,000,O00 in one year certifi-
Gates. The issue of short term certificates
is a novelty, and as such attracted more
discussion.
The genera! opinion was that both
measures would tend to draw idle money
from private boards and thereby reduce
the premium on currency and restore nor
NAL conditions In the money market.
So strong was this feeling that 1t was
understood that gold engagements would
cease after today. International bankers
declared that the gold already engaged
is as much as New York can justly take
from Europe under the strained condi-
tions which prevail there, and to take
more will only compel its return at a
later date. ~
It is not considered desirable to force
the Bank of England to raise y discount
rate to per cent, as has been talked Of
In London, nor to force the German rate
any higher than TX per cent which 1t has
already reached. If more gold Is desired
the issue of short term certificates would
afford just the sort of security which the
Bank of France has been disposed to in
ST., upon in the recent negotiations
through MT. N1OTBdH iOuoc'
Similar to Deal of 1890
The shipment of gold to New York
against the deposit of such certificates
would parallel closely the shipments of
81, 100000 made to London at the time OF
the panic of 1890.
This loan was secured by the deposit
with the Bank of France of exchequcr
bonds issued to the Bank of England by
the British government in exchange for
national debt stock. Exchequer bonds
represent form of short term obligation
which Is issued frequently by the British
government. The issue of short term obli-
cations has been less frequent with the
American government. but bankers de-
clare that they will meet admirably the
demands of the present occasion because
they can be taken up and paid for at the
expiration of their term from the treasury
cash balance, which can be done without
danger.
An excess of cash will be on deposit in
the banks according to all past precedent,
even If the depression is acute, because
after the first fright is over cash accu-
mulates in periods of depression, for
which there Is little call Tor investment
in new enterprises.
The response from the public to the
offer of new securities is expected TO
center largely on one year certificates
The Panama bonds, paying only per
cent and selling at a premium, are ex-
pected to go chiefly to the national banks
TO be used as a basis for circulation.
Big Demand Looked For
IL the experience of the popular loan of
1896 is repeated, however, in respect to
the certificates they will be oversubscribel
several times
Secretary Cortelyou is counted upon to
deposit the proceeds of both classes Of
securities at once in the national banks,
where they will be available for the pur-
nose of general circulation.
The premium on currency showed signs
of weakening today, being quoted at from
N115 to 21h per cent. Bankers declared that
1t will disappear before bids close for The
treasury certificate and that the monetary
phase of the crisis will then tend to pass
away.
= Throughout the day reports circulated
with more or less deflniteness, but were
denied, that the banking house of ]. p.
Morgan & Co. was organizing a syndicate
for the purpose of taking over consider
able block of the new treasury ISSUE the
amount being variously stated from $25,
OOG.00O to $100, ,000, 900.