Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-11-29
ALLOTMENT OF s35,OOO,o00
oNE-YEAR CERTIFICATES WILL
SECURE BANK CIRCULATION.
Effect Of New Loans Upon Treasury
Resources and the Money
Market Discussed.

The crisis in the money market is prac-
tically over. if the recent statement made
by the Secretary of the Treasury that
further subscriptions to the one-year
Treasury certificates would not be Ee-
ceived may be taken as an indication.
Official figures have not been made pub
lie as to the amount of the certificates
allotted. no. has it been stated whether
further allotments would be made for SUBJ
scriptions already received. The amount
of the allotments made. however. is to be
about $35, 100000. and this is probably the
UNIT. All individual subscriptions having
been rejected, 1t is anticipated that nearly
the whole of the $35. OOO, 900 allotted will
be used to secure new issues of bank
notes. AS these issues will be retired
within less than year. they will not in
st1fute permanent imitation of the bank
note circulation
Inc erect of the new loans upon the
future of the Treasury resources and on
the money market is already receiving
attention at the Treasury and in banking
circles. From present sources of infor-
nation the amount nominally added to
the cash balance of the Treasury will be
about SS5,O0O,OOO, of which $50, 1000, 900 will
represent the per cent Panama bonds
and $35OOO.OOO will represent the one
va sAAASoSCo nave UcSu d.
lotted
This amount would increase the present
nominal balance from about $241.3 93. 217-
where it stood Wednesday-to a little
more than $325.OOO,OOO. A small addition
al amount will be derived from the pre-
MUM on the Panama bonds. but even if
this should average as high as per cent
1t would amount to only $2,5OOOOO.
with nominal balance, however, of
more than S32o, 100000. the Treasury will
Il
med'ately available. This is because of
deposits In the national banks and other
deposit items. These items amounted
Wednesday to SPA. a3s. $50, leaving an
actual working balance of Sc, 463, 62S The
secretary has announced that 80 per cent
OF the payments for Panama bonds will
be left in the custody of the national
banks purchasing the bonds. and about
70 per cent Of the payments for the one
year certificates will besleft with the
banks.
Effect Of the New Loans.
The effect of these changes in the
Treasury balance sheet, upon the basis of
issues OF both classes of securities to the
amount Of $s5.000.OOO, will be to increase
the amount in banks to about $500 600, 900,
and the working balance to about 500 OOO.-
Ooo The increase of $14.OOO.OOO in the
working balance will be due to the reten-
tion IN the Treasury of $5.OOO.OOO or 10
per cent OF the principal of the Panama
payments. and about s3,OOO,OOO, or % per
cent OF the principal of 1895 coo OOO in
Treasury certificates.
This condition of the Treasury finances
VIII " l., be changed materially in the spring
program of retiring a considerable por-
ton of the 0ne-year certificates before
maturity. He will have no dificuIty in
doing this and saving considerable pro-
portion of the interest to be paid on them.
II the agreements made with banks to
this effect can be carried out under the
condltlons OF the money market existing
In the spring. If s3O,OO0.O0O of the GER
tlhcates can then be paid off. the cash
balance will fall to about 1906 900, 900, de-
quarters of the amount paid off. Or to
s2n 100000. and the cash balance will
fall to about s15,0OO,OOO.
Increase in Working Balance.
The loss in the cash balance will be
que to taking from the treasury cash
I'd per cent of the amount paid for the
retirement of the certificates. It seems
probable. however, that money market
conditions will be such that the Secre-
tary will feel justified in calling upon
than comes to them in payment for
the treasury certificates which are
called and surrendered Under these
circumstances. while the general bal
ance would remain the same, deposits
in banks could be reduced and the
actual working balance would lie in
creased.
1t Is not only considered highly de-
slrable to reduce deposits in the banks
as soon as money market conditions
permit, but it is believed that there
VIII be little difficulty in doing so. If
the Treasury can reduce these .lenosjts
to the peighborhood of 5000 900 600 in
the course of the spring. it will then
nave at its command about 100000, 900
as working balance. from which de-
POSTS could be made from time to
time to aid in the crop movement in
the autumn, If they were required. The
history of previous crises has shown
Idly in the banks after the worst of
4 crisis is over.
Herndon and Vicinity.