Los Angeles herald., 1907-11-27
TREASURY IS
ABLE TO MEET
EMERGENCIES

BY the end of the week the country
should have had as instructive an object
lesson as any made possible heretofore
by ira. sactons of the treasury depart
ment. National bankers in the past have
been swiftly taught lessons of great
value to them by the manner in which
the treasury department has met emer-
gencies. In the spring of 1881. after the
national bankers had expressed their dis
satisfaction with the refunding bill,
passed in the last weeks of president
Hayes administration, by retiring circu-
lation aggregating nearly thirty millions
in a few weeks, the secretary or the
treasury, Mr.. Window, taught them
lesson by calling the entire issue Of
bonds while at the same time Offering
to permit bankers to retain them pro-
vided they would accept rate of inter-
est which was one-half of one per cent
less than the interest named in the re-
funding bill. Thus in that manner that
great issue was refunded and the Dank-
ers were taught that 1t is inexpedient TO
attempt to force the hand OF the gov
ernment. especially at the time of
crisis, says the Philadelphia Press.
Again, in 1879 Secretary Sherman made
H. apparent that the people of the United
States would gladly invest in govern
ment securities If these were issued in
small denominations. That attempt to
float a large popular loan to facilitate
the resumption of specie payment failed
of success solely because the machinery
for getting it into the hands of the peo-
pie was not perfected. Twenty years
later Mr.. Vanderlip, assistant secretary
of the treasury, passed a loan of two
hundred millions directly from the
treasury department into the hands of
the people without entailing any other
expense, than clerical charges, express
charges, stationery and telegraph tolls.
No one who has had experience with
depositors in various institutions, ma
tional banks, trust institutions or saw
ings banks, who, through fright have
Withdrawn their deposits and boarded
them, has failed to observe that these
timid persons are very anxious to be rid
of the responsibility, and some of them
have been tempted to exchange their cur
rency for cashiers checks, which, In
some instances, they have deposited in
their safe deposit vaults, thinking these
checks more secure there than If placed
to their credit in any bank Many of the
permanent guests at hotels have paid
their charges, sometimes as far ahead
as three months, thinking that a good
way TO take care of a portion of their
Withdrawn currency. Others have
searched the markets with intent to buy
odd lots OF good SecurlIleS.
So it has been apparent that If there
we're any security easily obtained, carry
ing a fair rate of interest and having
behind it unimpeachable credit, much of
the boarded currency would speedily find
its way to the places where currency
could be exchanged for that security.
Very likely. Secretary Cortelyou, upon
the occasion of his most recent visit to
this city, was informed that currency
was in aiding, chiefly because the owners
of it had no confidence in the ordinary
channels of circulation, but that it would
speedily be tempted from its hiding place
if something in which perfect confidence
was vested was available.
OF course, ordinary government bonds
for which there is no market, excepting
that of the national banks, and which i'll
order to make that market must have
term of years to run before the option
of the government to redeem begins
were not available for the great majority
of those who have withdrawn currency
from the banks. But the treasury notes
which Mr.. Cortelyou has offered for sale
should be absorbed as speedily as they
can be issued.