The midland journal. (Rising Sun, Md.) 1885-1947, 1907-11-29
WASHINGTON LETTER.

OF course all eyes are turned on the
more or less experimental issue of gov
eminent bonds and certificates of indebt.
edness that the government is putting
out to relieve the stringency of the money
market. This action of the Secretary oil
the Treasury is praised or condemned
according to the party to which the COM
,nentator belongs. There seems to be
little dissension, however, over the fact
that it was about the only method OF
relief open to the Treasury Department
and that it is going to be availed of BY
the banks to the full extent. Secretary
Cortelyou has offered $50, 200, 900 in
Panama bonds and $1oo, ooo, 900 in low
interest bearing certificates, such as were
authorized for issue during the war with
Spain. This relief was originally in.
tended as war measure and it is perhaps
stretching the law little to invoke it in
the present instance. But the application
for bonds and certificates has already
been great enough to show that the issue
will be over subscribed. Most of the
applications for allotment that have been
received SO far have been from individ
uals and from the sulaller banks. The
big banks never put in their bids for a
bond issue till the last minute, partly to
get the latest possible line on the market
and partly to keep the amount of their
bid from leaking out.
1t is understood that syndicate of the
New York banks is going to bid on
$40, 900. 900 worth of bonds. There have
already been almost enough applications
from other quarters to absorb the entire
issue. Some of the applications have
been accompanied. by conditions. prin-
cipally that a certain portion Of the
money paid in shall be deposited in the
banks of the town from which the bid is
received. The Treasury Department has
returned all such bids, with the assur.
ance that nothing but straight purchase
offers will be considered and that the
Department will not be limited by con-
ditions of any sort. 1t is almost Ger.
tainty that the bulk of the money realized
by the bond sale will be deposited in the
west and middle west, where it is most
needed for crop movement and other
practical purposes. The President has in
fact been annoyed by the way that many
of the banks, especially the New York
banks, have held on to government funds
after they got them in their vaults. This
boarding of cash by the banks is quite as
bad for the general situation as the
boarding of cash by individuals 1t de-
feats the very object for which additional
funds are being distributed. New York
banks have been the worst offenders in
the cash boarding business, but the in.
terror banks have not been far behind
them. 1t is not intended to give any adj
ditional relief to the New York banks il
can be avoided.
nv
Of course there have been any number
of suggestions made for reforming the
currency system when Congress meets.
Few of the suggestions have come from
men whose positions entitle them to
much. consideration. 1t is interesting to
note that one of these is William 7.
Bryan. who is now in Washington. Mr..
Bryan said that he had been in favor OF
currency reform for years, and that when
in Congress had presented bill for that
purpose, his suggestion now was along the
same lines. 1t was that the government
should absolutely guarantee the deposits
of all national banks, and should have
the failure of any one of them made good
by other banks under similar government
guarantee. This looks on the face of il
like rather cool offer for the government
to make to the banks, namely that they
make good the losses through the failure
/ of any one of their associates in return
merely for government guarantee of their
deposits. In reality, however. it is not a
half bad suggestion. The losses through
national bank failures annually amounts
to only one tenth of one per cent of theii
capital stock. The banks of the country
could well afford this slight tax for the
sake of government guarantee, as the de.
positors would he absolutely protected
and would feel just as much confidence in
such bank as they would in the Treas
ury Department itself. The confidence /:
the only thing lacking to make the panic
absolutely a thing of the past. Mr.
Bryan points ont in his suggestion thai
one advantage of this remedy is that the
machinery for its operation is already in
existence. All that would be necessary
would be TO pass law putting it into
effect. 1t is assumed that the banks
would readily subscribe to such an