The Billings gazette. [volume] (Billings, Mont.) 1896-1919, 1907-11-19
GOVERNMENT WILL TAKE STEPS
THAT WILL REMEDY ANY
MONEY ;sTRlNGENcY.
VAST SUM ASSURED
Administration Decides to Issue $780,
100000 in one-Year Treasury Ger
tificates and s5o,ooo,ooo in Panama
Canal eonds-PopuIar Subscription
Will Be Asked-Money for Banks.

New York, Nov. dissatisfaction
was general in banking circles today
because Of the governments plan of
relief to the market by the issue of
$50,000,000 in Panama bonds and $780,
100000 in one-year treasury certia-
Gates. The issue Of short term GER
tihcates was more of novelty and as
such attracted more discussion.
The general opinion was that both
measures would tend to draw idle
money from private boarding and
thereby break the premium on cur
rency and restore normal conditions
in the money market.
So strong was this feeling that it
was understood that gold engage
ments would practically cease after
today. international bankers de-
clared that the gold already engaged
is as much as New York can Justly
take from Europe under the strained
conditions which prevail there, and
to take more will only COMPEL its re-
turn at a later date. 1t Is not consid-
cred desirable to force the Bank Of
England to raise it's discount rate to
8 per cent, as has been talked Of in
London, nor to force the German rate
higher than 71a per cent, which it has
already reached.
Short Time Obligations.
It more gold was desired the issue
Of short term certificates would af-
ford just the sort OF security which
the Bank Of France has been disposed
to insist upon in the regent negotia-
.tions through Mr.. Morgan's house.
The shipment Of gold to New York
against the deposit of such certificates
would parallel very closely the ship
ments OF $15,OOO,0OO made to London
at the time of the Barring panic in
1890. This loan was secured by the
deposit with the Bank Of France by
exchequer bonds issued to the Bank
Of England by the British government
in exchange for national debt stock
Exchequer bonds represent a form OF
short term obligation which is issued
very frequently by the British govern
ment.
The issue of short term obligations
has been less frequent with the Amer
ican government, but bankers declare
that they will meet admirably the de-
mands of the present situation be-
cause they can be taken up and paid
for at the expiration of their term
from the treasury cash balance, which
can then be Withdrawn without dan
ger from the custody of the national
banks. An excess of cash will be on
deposit in the banks, according to all
past precedent, even if business de-
preston is acute, because after the
first fright is over cash accumulates
in periods Of depression for which
there is little call for investment in
new enterprises.
Panama Canal 6ondS.
The response from the public to the
offer of new securities is expected to
center largely on one-year certificates.
The Panama bonds, paying only 2 per
cent and selling at a premium, are ex-
pected to go chiefly to the national
banks to be used as a basis for circu-
lation. If the experience of the popu-
lar loan Of 1896 is repeated, however,
in respect to the certificates, they will
be over-subscribed several times. Sec.
retary Carlisle on that occasion inyit-
ed subscriptions for s10O,OO0O0O of 4
years. There was grave doubt, under
the conditions of decentralization pre-
yailing at that time, both in the money
market and in the political situation,
whether the subscriptions would be
sufficient to permanently restore the
gold reserve.
In anticipation of the difficulty, Mr..
Morgan organized to bid for the en-
tire amount of the bonds and eventu-
ally obtained about one-third, at his
price, of the issue. The number of
subscriptions of bona fide character
was 4,64O and the amount subscribed
to cover the s1oO,OOO,OOo offered was
$56,269,S50 Subscriptions at other
figures than MIR. Morgan's were sub
mitted for $66,7sS, $50 and, barring de-
faults for trifling sums bonds for this
amount were distributed in small lots
throughout the country.
Anticipate Large Subscription.
It is declared by bankers that finan-
cial and political conditions are in
finitely more favorable at the present
time than they were when the gold
reserve was almost wrecked and the
possibility OF a change OF money
standard was confronting the coun-
try. It is the belief, therefore, that
subscriptions for the certificates are