New-York tribune., 1907-11-22
NOTE ISSUE.
STARTED BY CORTELYOU.
Syndicate's Conditional Bid Re iecte3
Money for the Hest.
From The Tribune Bureau. 7

Treasury has begun the allotment of the 3 per
! cent Treasury certificates. but he to-day re-
turned the bid of New York syndicate which
offered to take $25.ON0ONo worth of securities
under certain conditions which il prescribed
The Secretary's reply return of the bid.
together with the regular form and an invita-
tion to submit bid with stipulatiOns
| attached The same followed in the
| case of a 100000 bid which reached here
/ from St. Louis
Thus far all alIotments have been made in
the West and through sub-treasuries- Many
bids which reached here accompanied by cash
| were fled but the cash returned. with the
information that If aIlotments were made IL
| would be through the nearest Sub-Treasury and
| that the return OF the money would not preju-
dice the bid.
1t is intimated in administration circles that
the President is disposed TO hold the New York
bankers at least partially responsible for the
| continued stringency. and that he has taken a
hand in the distribution OF the proceeds OF the
bond and certificate sales and will insist that
they be deposited chiefly in the West Treasury
officials say the present indications are that both
issues will meet with unqualified SUCCESS
The Secretary OF the Treasury declines to an
| swer questions regarding the bond and certih-
cate issues beyond reiterating the facts con-
tanned in his original announcement and the
further fact that the certificates may be used
a q
that within two or three days he will probably
tssua a statement In which he will reply to nu-
rnerous questions which have been addressed 20
him on the subject Explaining his silence on
the subject, he said to-day that the reasons for
| il would be apparent when he Issued the pro-
! posed statement
/ Many of the banks are attempting 20 pre-
scribe conditions with their bids or asking Il sucn
| conditions will prove acceptable Most or the
banks It is understood. want TO insure tne de-
posit OF the proceeds in their city. In SONS IN
stances in their bank. In other cases 1t is urged
| that part of the purchase price be permitted
| to remain on deposit with ths bidder.
GAIN IN CUSTOMS RECEIPTS.
| II was stated at the Treasury to-day that
/ there had been for soma time a gradual falling
off of customs receipts. until two days ago they
/ had diminished to 100000. Yesterday, however.
| there was a marked increase and to-day the
| receipts reached s1.0O0.0o0. This Is regarded
as evidence OF a materially easier money market
of course. it is not a falling OF In imports
which has lowered the receipts. but a greater
proportion of goods placed in bond The in
creased receipts. therefore. indicate that mer-
chants have more money and are paying the
customs instead OF putting or the day Of pay
ulent by recourse to the bonded warehouses.
I 1t is expected that when Speaker Cannon
i sees the President he will inform him most
emphatically that much OF the blame for the
financial stringency in the West and the conse-
quent inconvenience is TO be laid at the door Of
the New York banks. and will urge that in so
far as possible all proceeds OF the bond and
certificate sales be sent West.
The two most essential elements to be con-
sidered in connection with the one-year certih-
Gates are the amount Of cash required 10 be paid
into the Treasury and II national banks taking
the certificates will employ them to increase
circulation. The Secretary is almost compelled
bv the terms Of the law under which the certih-
Gates are issued TO retain some part or the pro-
! ceeds in the Treasury, since the law authorlzes
their issue to meet extraordinary expenditures.
The nominal cash balance OF the Treasury stood
TODAY at only IS. s.952.412. after deducting the
amount of public money deposit in national
hanks This is obviously below the working
requirements of the Treasury. and the secre-
tary might find legal justification against criti-
cisrn in Congress in the fact that he needs cash
to recoup this balance
If the essential object of the issue is to In
crease the available amount OF currency. lead
ing financiers say it can only be done by the
issue of banknotes against the new securities
and the restoration Of a part OF the cash pro-
ceeds to the bank. The issue Of banknotes
would exactly offset the cash paid for the GER
tihcates If the cash was all retained In the
Treasury. and a net gain in circulation would
come only by returning part or THIS caSn 10
the banks These considerations. It Is held. ap-
ply particularly to such Of the certificates
may be subscribed for by national banks.
moral benefit is expected from the sale OF other
| amounts 70 the public by drawing back into cir
culation currency which Is now boarded.
PAYMENT ON AILOTAIENTS.
| Upon aIlotments actually made. It is stated
payment must be made either directly in cash
/ or in the form Of bookkeeping transfers by
/ which cash paid shall be credited to the sub
scribing bank deposit.
The matter of allotments is proving some
what delicate one. and care is being taken to
avoid any we'll founded charges OF favoritisrn
| IT is felt at the Treasury however, that no just
criticism will lie against the action OF the Sec
| retary If allotments are based chiefly upon def
| mite and binding assurances by national banks
| that they will take out circulation TO the
full amount of the certificates allotted to them.
| The proposal to threaten banks TO take away
their public deposits If they do not comply with
| the wishes of the Secretary of the Treasury has
not been considered at the department
The fact that circulation secured by certificates
can be retired within a year without regard To
the limit of 100000 month imposed on retire
ments of notes based on other classes of bonds
| will enable the banks TO expand much as they
desire to meet the present emergency without
being loaded down with circulation which they
cannot retire or otherwise employ when the sup
ply of money becomes redundant In this respect
the fact that the limit on retirements does not
apply TO bonds which have been called for re-
demption gives a peculiar character to the one
year certificates. and the circulation which may
be based upon them. and makes such circulation