New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1907-04-02
NEW TREASURY POLICY.
National City Bank ReUieScs Recent
Operations.

The National City Bank IN its April circular on
government finance and government securities
says. in part:
There has rarely been a month when the gov
cial matters Secretary Corbeyous various orders
affecting the money market include the declsioa
made last fan the offer 10 purchase s25gNT@ 4 :
rnetnrng July a. par and accrued ,hl9I syos T.
tes Of customs receipts in cities where there are
against railroad and municipal bonds Of Sl5.oOOel
sn New York City repositories In order 10 give
ut par and accrued interest the Secretary PEI
mitted those banks having such bonds Indec put
road and municipal bonds.
IN the money market the Secretary OF the Treasury
has In the first month Of mis- incumhency, seen the
absolute necessity Of these numerous expedlenls.
That they were necessity is beyond deoate. Inc
most important action in the way Of Offering I'M
sl600OOe0 in the New York banks. and had that
action not been taken, or had II been furtner De
template Since January the government has
taken from the money market, excluding the pre-
receipts over expenditures saO.s59, 500.
The pernicious effect Of the Suo-Ireasnry syS-
ten has seldom been more sharply emphasized upon
legitimate business conditions. Inc goVerhIleIl
S. tI ~ On ni,- neca1'se az the alertness
and courage shown in the Treasury DepaftnseII men
have the consequences Of the government VIII
Grawal Of funds from bank reserves been aV6rted.
Such condition of affairs as this has heretofore
been unayoidabie because Of existing legislation;
Now We have in the recent financial act. opened
a way OF permanently taking out of the money
operations That makes il possible for the = c
rotary place directly in depository banks an COY
eminent receipts Of whatever nature me VIZ -
therefore ma clear 10 the Secretary 10 peLlLl1l
funds TO flow naturally into the banks leaNlhs r.
serves undisturbed ana TO withdfaW MloIes ~ %
the banks only as the government s eAPeaoi' ies
For years We have had a system OF IllaISS -
has permitted the government income TO pear no
5io1 without q budget and one in which no at
tempt is made make the results OF taxation Dal-
That in Itself makes government financing mat
more less OF chance. but our Sub LressuLs
* such method Of financing directly to the nanks
"a have been hs5 been withdrawn from bank re-
serves and lockesEup in the sub treasures When
sh:S withdrawal created crisis the Secretary came
- me relief of the disturbed situation and gave
Lack 10 the money market part or all Of what had
went on again until the next necessity arose.
Hith our Few legislation il Is within ne power
snd To withdraw funds from the banks as govern
1acnt expenditures made. the funds then NnGlng
rter way naturally AID directly back to the money
snefket That REVERSE the theory under which the
fakes out n the nnney market the perEicious infu-
ence 80 The governments current financial opera
IN s.,Ieal 1i,; l ,,d ~ ,l5o 9istrIst situation
men ere forced 20 appeal to the government ON
The strain on the money market which occurred in
March has been net from our own resources only.
curious and most unusual situation has PEE
tiCn 10 foreign exchange and gold movement ne
Bank of France The Bank IF Holland and the
Rznk Of Belgium each advanced rates during the
north and TIE German heicl1sb anS vas only pre-
verted from making advance by the ability Of
she Austro- Hungarian Bank 70 relieve the situation
IN Berlin by a moderate contribution 81 gold With
Tire Continental exchanges IN favor IF the Bank Of
England. that institution was enable 20 draw gold
from those markets. again emphasizing the fact
that the only free gold markets in the world are
London and New York.
During a good .art 81 :he month Hev YORK has
been In position to bring in gold from London
and At one t.ne there substantial proht in
bringing gold from Australia. New York bankers.
however. hare ref-ained from starting any con-
siderable gold movement in this direction. even
though the price ~ exchange made In normal
and natural movement. They have done that be-
cause the situation here appeared 10 make the
need for gold less imperative than the need
at the Bank OF England and there has been TO
desire TO further embarrass the European situa-
ton and force the Bank of England TO Join the
Continental institutions IN advancing the bank
rate