Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-11-25
Demand for Canal Bonds and
One-Year Certificates.
BETTER FEELING PREVAILS
Resumption of Currency Payments
by the Banks.
SITUATION RAPIDLY IMPROVES
Prospective Restoration Of Normal
Conditions in Exchange Rela-
tions With the Metropolis.

Offers for the Panama canal bonds and
still coming to the Treasury Department
this morning. and feeling of greater
confidence in the success of the loans
seems TO prevail than at any time since
their announcement The news from
New York and other money centers that
currency payments would soon be resumed
was accepted as evidence that the policy
Of the Treasury had contributed it's share
in the restoration of confidence While
Secretary Cortelyou fully appreciated the
fact, In announcing the issue Of the GER
titicates, that they might become a source
of bank note imitation to a certain extent,
he believes that the character of the GER
tifcates will prevent the imitation from
assuming a dangerous character.
Not to Be Used as Currency.
1t is not considered at the Treasury that
the certificates themselves will be used to
any considerable extent as currency. A
few may be passed back and forth in set
Elements between banks, where settle
ments in cash have not been resumed, but
these would only take the place of clear
ing house certificates and perhaps permit
the retirement of those instruments soon
The fact that the certificates bear inter-
est and are redeemable within one year
are the distinguishing marks by which
they are considered to differ radically
from any form of currency. If they are
used to initiate the currency at all, it will
be as security for banknote circulation.
but this cannot last beyond the one-year
term of the certificates, and 1t is believed
that If banks find their circulation COM
ing back upon them rapidly for redemp-
will hni vH,ifh In
the year. even though they continue to
hold their certificates as an investment.
They will not be hampered by the limit
of $9,OOO,OOO per month imposed upon the
retirement Of bank notes, because the
limit does not apply to securities which
have been called for redemption.
May Not Allot Full Amount.
The situation is SO rapidly improving
that it is quite possible that allotfnents
will not be made for the full amount Of
s1OO. 900, which Secretary Cortelyou
announced a week ago would be offered
to the public. 1t is declared by financial
experts that even if Industrial conditions
continue unfavorable, there is little doubt
that money will accumulate rapidly In
the banks after currency payments are
resumed, because there will be a lack of
inclination to borrow it for new enter
prises
This will give the banks such surplus
that they can respond to calls from time
to time from the Secretary of the Treas
ury for the surrender of public funds, and
these funds can be applied to the redemp-
ton of the one-year certificates. Treas
ury officials and others. who have been
through previous periods Of strain de-
clare that events after a crisis always
follow practically the evolution above set
forth. and that this evolution of events
has been fully anticipated by the admin
istration.
Adequate Local Supply.
The news that currency payments would
soon be resumed was gratifying to local
bankers in Washington, because it will
permit the restoration of normal condi-
tions in exchange relations. There has
been no suspension Of currency payments
by the banks of Washington. because the
large disbursements for salaries and other
purposes, made by the government chief
ly in currency, always keep an adequate
supply afloat In a few cases where
banks have been called upon to buy
large amount of New York exchange
which has depleted their cash they have
met the situation by selling the exchange
to other institutions, and thereby dis
tributed the burden.