Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1907-11-20

Washington, Nov. 19.-The commune
cations which came to the treasury de-
partment today. approving the financial
policy adopted by the President AND
Secretary Cortelyou and I'll" sdbScri.,-
tions which We're received fui the Par
anna bonds and one year certificates
We're the subject OF discussion at the
meeting of the cabinet ana afforded
general qualification. While details re
gardin;, the subscriptions have not been
made public. it seems to be the feeling
al the treasury that both loans will h.
over-SuEscribe,l az was the case with
the popular loan of $loo.noo.o 900 ISSUED
by the Cleveland administration in 1899.
Tho decline in the stock market to-
day is regarded as only Il symptom OF
hesitation until the full effect Of degree
of success of the government measures
are proved by the opening of the bids.
several important questions are being
raised IN communications addressed To
the treasury. but the treasury officials
are exercising an unusual amount OF
care in defining their position.
one Of these questions upon which
no official information has Vet been
given. is whether the new 1-ycar Ger
serves. 1t is prescribed by Section 51al
of the Revised Statutes that banking
reserves shall be lin Lawful money Of
| the United States.
This can mean only gold and silver
coin certificate notes. The law Goes not
even permit bank notes. which cirru-
| late as currency, to be counted as re-
| serves. although small amounts ar"
occasionally included in the same pack
ages with lawful money.
As Il large portion Of national banks
| are now being permitted to do bust
ness with their reserves considerably
| re duced below the legal limit, the
| question whether the proposed treas
| ury certificates shall be counted as r.
serves or investments practically only
| a matter of bookkeeping. The law IS
! framed however, to require actual
| money to be held in reserve and th"5"
| familiar with the currency systems of
other solvent countries declare that IT
| would be entirely contrary to sound
| policy to count an interest bearing
| certificate of debt as the equivalent of
money under normal conditions.
| \ policy Of reserve is being pursued
| by Comptroller Itidgley apparently for
the purpose of avoiding amy unfavor-
| able impressions among bankers or
| misunderstanding by the public pend
| ing the opening of bids for the new Sc
| curities If The certificates are redeem
| ed at the end of one year according to
| their terms, il is believed at the treas
ury that there will he no difficulty in
| Withdrawing money from the banks for
| the purpose at that time. because mon
| cy usually accumulateS rapidly in the
banks after the first furry of Il crisis
has passed ana as general business and
| Speculat ton becomes curtailcd
| Tho possibility is attracting some at
tCntion that the issue of the 1-year
| certificates will be criticized in Con-
greSse Gin much the same manner a;
the sale of bonds to the Morgan syn
dictate to protect the gold reserves in
1875. The criticism of President Cleve-
lands measures in 1895 went SO far
that a committee was appointed to in
| yesti.ate the contract with j. i. Nor
gan & Co.
A considerable part of the criticism
at that time was directed against the
exclusive nature of the contract and
this criticism will not be against the