The Birmingham age-herald., 1907-11-20
That Bond Issue and CsrtiH- cates WII Be OVsrsub-
 sCribed Is Certain
DECLINE IN STOCKS
 IS N0T CONSIDERED.
Treasury Officials Are Deliberating Over Details Regarding Subserip-
 tions and Several Points
 Are Yet To Be Settled.

Washington, November 19.-The com- munications which came to the treasury department today approving the financial policy adopted by the President andi Secretary Cortelyou and the subscrip- tons which were received for the Panama canal bonds and one year certificates were the subject of discussion at the meeting of the cabinet and afforded gen-l eral qualification. While details regard ing subscriptions are not yet being made public, it seems to be the feeling at tho treasury that both loans will be over- subscribed, as was the popular loan of s1oo,0 900 issued by the Cleveland ad- ministration in 1896. The decline in tho stock market today is regarded as only a symptom of hesitation until the ef- feet of the failure or success of the measures are proved by the opening of bids.
 Several questions arc being raised in the communications addressed to the treasury, but the treasury D..cials are exercising an unusual amount of care in defining their position. One of these questions upon which no official infor- nation has yet been given, is whether the new one year certificates will be avail able for bank reserves. The law on tho subject seems to be sufficiently clear that they are not available for this purpose. but it is possible that the presence of few of them in reserve under critical conditions would be winked at. just as in the case of the clearing house certif- cate. It is prescribed by section 5191 of the revised statutes that banking re- serves should be "ln lawful money of tho. Erlssaay s,tatetsi Tbis can e1GF. moan gold aDd si,sss4s of cqin eepSif ales. aha lc- gal tender notes.
 The law does not even permit bank notes which circulate as currency to be counted as reserves. although small amounts are occasionally included in the same packages with the lawful money. As a large proportion of national banks are now being permitted to do business with their reserves considerably reduced be- low the legal limit the question whether the proposed treasury certificates shall be counted as reserves or investments is practically only matter of bookkeeping. The law Is framed, however. to require actual money to be held in reserve and those familiar with the currency sys- tems of other solvent countries declare that 1t would be entirely contrary to sound policy to count an interest bear ing certificate of debt as the eduiva- lent of money under normal conditions.
 A policy of reserve Is being pursued by Comptroller Ridgely apparently for the purpose of avoiding any unfaYora- ble impressions abong the bankers or misunderstanding by the public pend ing the opening of bids for the new securities. If the certificates are re- deemed at the end of one year. accord ip fn hoi ia haIfaVa1 a the treasury that there will be no diff nculty in withdrawing money from the banks for the purpose at that time. because money usually aocumulates rapidly in the banks after the first furry of crisis has been passed and as general bushes sand speculation be- comes curtailed.