The daily morning journal and courier. [volume] (New Haven, Conn.) 1894-1907, 1907-11-21
ULTIMATUM TO
The TREASURY
Leading New York Bankers De-
mand Certain Concessions
Before Taking Notes.
CURRENCY PREMIUM
THE REASON GIVEN
Bank of France May Send $780,
100000 Here, Accepting
New Notes as Col
lateral.

New York Nov. 2o-There were three
interesting developments in the fnan
cial situation to-day, all having direct
bearing on the issue of $1OO, 900 Of
8 per cent. Treasury notes and the
flotation of $5O,OO0,oO0 of new Panama
bonds.
In the first place, a rise Of one quar-
ter per cent. in the premium on cur
rency, which forced the banks to pay
the money brokers 2 1-2 per cent for
ready cash which was bought in guam
THY last night for ia per cent made
several large institutions withhold for
twenty-four hours their bids for the
new government Issues. The leading
bankers of the city made representa-
tions to Secretary Cortelyou that ow-
ing to the premium still prevailing on
currency, it would be impossible for
them to buy the new per cent. notes
unless they could be assured first that
the purchase money would be left on
deposit with the purchasing bank the
government taking the new notes as
collateral for the deposit, and, second,
that the bank would then be free TO
substitute railroad or municipal bonds
for the collateral underlying the gov
ernment's deposit of the bond purchase
money, and Immediately pledge the
notes thus released as basis for ad-
ditional circulation.
Another development of Importance
was the effort of large foreign banking
houses to obtain the cooperation Of
directors Of the Bank Of France in a
scheme to advance $4,000, 900 or $50, :
100000 Of gold, using the new treasury
notes as collateral, with the promise
of repayment within SIX or eight
months.
The advance in the premium on cur
rency was thought by many to reflect
preliminary purchases of cash~by sub
scribers, for the new rates. Some
bankers regarded this as an altogeth-
er natural development of the demand
for the bonds from private investors,
some of whom had not the ready cash
to put up, and would be forced to pay
for the bonds with currency purchased
with certified checks
AT any rate, the rise In the currency
premium had directly to do with this
movement, as a good portion of the de-
mand for the notes came from out-of-
town banks, which had not the neces-
sary cash to put up. These subscrip-
lions, although small individually, ag-
gregated o sufficient sum to swell the
demand for currency at this centre and
give the money brokers another busy
day
One of the best-known bankers in
the United States, who has been In
close touch with the Washington pro-
gram, went so far as to say that the
500, 100000 note issue would be a fall
ure as an expedient Of money market
relief, unless Secretary Cortelyou made
| 1t possible for the subscribing banks
to receive government deposit Of tbs
purchase money, and in addition tc
take out an equivalent amount Of new
circulation. He added:
"A bank must receive something
more than a government deposit Of the
bond purchase money to make the op'
Grafton successful, If it got nothing
more than that, 1t would be no bettel
off than 1t was before, not having {
cent more cash. But il the treasury /:
willing, after giving us the special de-
posit, secured by the notes, to let u!
substitute other collateral, on condition
that the released notes shall be uset
as the basis for new circulation, W,
can go ahad; otherwise we cannot
Secretary Cortelyou has been made tt
see this phase of the case to-day"