The Montgomery advertiser., 1907-11-29
FINANCIAL
 CRISIS OVER Cortelyou's Action h. dicated Improvement. NO FIGURES YET GIVEN OUT About $35,OOO,OOo One Year Cert
 ficates Issued. Allotment Was sso.oeo, ,ooo-Plans Be- ing Arranged for Future of Trens- ury Resources-Payment Left
 to National Banks.

nOuncenent Dy Hecretary Sorteyiou last night that further subscriptions to the one year treasury certificates would not be received Is regarded here as Indicating that the Secretary con siders the crisis in the money mar ket to be practically over.
 off1ciai figures have not been given out at the treasury of the amount of the certificates allowed. The allot- ment made, however. is said to be about S35,000.000. and this Is probab- ly the limit. All individual subscrip- tions having been rejected. 1t is antic- ipated that nearly the whole of the | $35.000,000 allotted will be used to help new issues of bank notes. As these issues will be retired in less than a year they will not constitute per manent Imitation of the bank note ctr culation.
 The effect of the new loans on the future of tho treasury resources and of the money is already receiving at tention at he treasury and in banking circles. From present sources of in- formation, the amount nominally ad- ded to the cash balance of the treas- ury will be about sS5. 900, of which
 s5o.000,000 will represent the two per cent Panama bonds and s35.000,000 will represent the one year certificates
 which have been allotted. This amount would increase the present nominal
 balance from about s241.393.217, where
 1t stood yesterday. to q little more than s325, 900. A small additional
 amount will be derived from the pre- mium on the Panama bonds. but even
 If this should average as high as
 per cent 1t would amount too nly $2,- 5e0.000.
 Nations Cash Balance.
 With nominal balance. however, of more than $325, 100000. the treasury will not have anything like that amount immediately available. This Is because of deposits in national banks and other deposit items These items amounted yesterday to s234,- 93s.5Ss, leaving sn actual working bal- The Secretary has announced that 90 per cent of the payments for the
 Panama bonds will be left in the cus-
 tody of the national banks purchasing
 the bonds; and about 75 per cent of
 the payments for the one year certifi- cates will be left with the banks. The effect of these changes in the treasury balance sheet upon the basis of issues of both classes of securities to the amount of $S5,000.000. will be to in- crease the amount in banks to about $500. 900. 900 and the working balance to about $22.000. 900.
 The increase of $14.000.0 in the working balance will be due to the re- tention in the treasury of $5, 900. 900 or ten per cent of the principal of the Panama payments. and about s9.000.- 900 or 25 per cent of the principal of $35.000,000 in certificates.
 This condition of the Treasury finances will be changed materially in the spring if the Secretary Is able to carry out the program of Setiring a considerable portion of the sone year certificates before maturity. If s3o.- 100000 of the certificates can then he paid off the cash balance will fall to about $2s5.000.000. deposits in banks will decline by three-quartsrs of the amount paid off or to $277, ,500 900 and the cash balance will fall to about $15,- 100000. The loss in the cash balance vii be due to taking from the Treas ury cash 25 per cent. of the amount paid for the retirement of the certifi- cates. It seems probable. however, that money market conditions will be such that the Secretary will feel jus ttifed in calling upon the banks for considerable more cash than comes to them in payment for the Treasury cer- tificates which are called and sur rounded.
 To Reduce Bank Deposit.
 It is not only considered highly de- sirable to reduce deposits In the banks as soon as money market conditions permit. but it Is believed that there will he little difficulty in doing so. If the Treasury can reduce these deposits to the neigh borhood of $200, 000. 900 in the course of the spring 1t will have at its command about $1o0.000, 900 as a work Ing balance from which deposits 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\that money tends to accumulate rapidly In the banks after the worst of a crisis Is over.
 The policy of the Treasury in pro- viding for the redemption of the one year certificates within a shorter term than one year will involve the eIiin- ination of the bank note circulation based upon those certificates and con- siderable withdrawal of cash from the banks into the Treasury. The fact that the limit of $9.00O0 900 per month imposed upon retirement of bank note circulation does rot apply to notes based upon securities which have been called for redemption, removes any ob- stacle to the prompt retirement of ex- cessive bank note issues by the pay ment of lawful money into the Treas ury as soon as the securities are called and paid.
 From present indications the Treas ury will not only have ample cash at demand during the spring. but it Is famine of the moment will be turned into a glut which only foresight on the part of the Treasury will prevent from into unnecessary infiation.