Los Angeles herald., 1907-12-02

was proposed. In this respect the
present administration departed from
the policy pursued in 1893, when meas
ures of relief were usually adopted
only when they became imperative. 1t
is felt at the treasury that the wisdom
of the new policy has been vindicatei
that IL was better to take resolute
and broad measures, even II they went
beyond the immediate needs of the
situation.
Panama Bonds viii Help
The issues of Panama bonds will be
for the full $50.0o0,0o0, which was Of
fered. but the issues of one-year treas
ury certificates will not much exceed
25,000,000. 1t is probable also that
the Issues of new bank note circulation
will fall considerably within some OF
the earlier estimates, because of the
abundance of currency which will be
available when currency payments are
resumed by the banks and exchanges
resume their normal course
Since the Panama bonds will be held
by the treasury in the first instance
as security for the public money which
is paid for them left on deposit with
the purchasing banks, the bonds are
not expected to be deposited to their
entire amount for new bank note cir
culation. They can only be deposited
by substituting other classes of bonds
as security for deposits of money.
While this would have been done If the
new circulation had been required, 1t
is now expected at the treasury that
1t will not be done to anything like the
full issue of bonds.
If public money is withdrawn from
the banks in the spring, the bonds will
be released and would be substituted
as security for circulation issued
- IL . a L --
latter were then paid OFF with interest
to the date of payment.
The information reaching Secretary
Cortelyou and Comptroller Ridgely Is
very favorable to the resumption of
cash payments by the banks as soon as
the December pay rolls have been dis
rosed of. 1t is not believed there will
be any disposition on the part of the
depositors to make a run for cur
rency. Bankers who have been In
town have, in many cases, reported
cash reserves in their banks much in
excess OF legal requirements.
Banks Hold Cash
Some banks which are not in central
reserve cities are holding cash to as
high proportion as 40 or so per cent
of their demand liabilities. Evidence
that pressure for currency is dimin-
ishing Is found in the statement of the
New York clearing house banks on
Saturday, with its actual increase of
nearly $2,000.000 in cash and it's re-
duction in revenues by over $1.000.000.
II this result has been attained with
considerable gold on the ocean and not
counting in reserves 1t is expected the
statement of next week will make q
still more favorable showing.
With gold imports aggregating $780,
100000, including what is on the way.
with new bank note circulation already
taken to the amount of about $780,
100000 within the past month, an addi-
tional circulation in sight to the
amount of perhaps $40,000,000, making
a total of new currency Of about $685.
100000 within the last few weeks, 1t
is not believed that it will be necessary
to go much farther in swelling the cir
culation.
On the contrary, it is anticipated
that money will become a drug on the
market within a short time. In the
panic of 1898 lawful money reserves
stood on July ~, 1898, at $2S9,544, $50,
which was the low point shown by the
report of the comptroller of the cur
rency, but increased by the date of the
statement for May 4. 1894, to $452,-
103,214.
Stood Strain Well
The manner in which the national
banks have stood the strain has been
very gratifying to the comptroller.
Less than dozen failures have oc-
CURED since October 1. which is not
much above the average of normal
times.
This is in striking contrast with
conditions in 1893, when more than 100
suspensions occurred at the height OF
the panic. Some of the suspensions in
1893 took place before the suspension
of currency payments, which in the
present case protected the banks from
runs by depositors, but the fact that
about half of the failures in 1898 were
not followed by reopening indicates
that the situation at present is much
stronger than at that time.
The creation of banks with capital
below $4,000 and not less than $685. ,001
has not apparently impaired the gen
eral strength of the national banking
situation. The number of banks on
October 81, 1893. was 3796. with an
aggregate capital of $695,55S120. The
number on October 81, 1907, was $3.50.
with an aggregate capital Of $s0s,-
274,775.
The number of new banks organized
with a capital of less than $4,000 since
such organizations were permitted by
the law of March IL. 1900. has been
2389, with an aggregate capital of
$62.312,5oO.
Resources Are Large
These institutions therefore, while
they have added only per cent to the
hanIrtny canftal have added a much