The sun., 1907-11-19
CURE FOR FINANCIAL ILLS
THE ADMINISTRATION ENPECTS
gTS REMEDIES VIII DO IT.
.OOks for RestOratlOn OT CODGIdence
-S'rrtIncates Of Indebtedness MAY Be
ReEIstered and win Be Accepted as
security for DeDNsIts ln Maternal Ranks.

SecurNS Tor DepOstts hi NauAOtaaH hanhs.
WASHINGTON, Nov. IS.-It IL not too
much to say that the Administration ex-
ects the financial measures announced
by Secretary CorteyOu last night to cure
completely the present financial situation.
A return of confidence is all that is required
in the opinion of the leading officials. To
restore confidence the public is being re-
minded oR the enormous credit of the United
States Government and to the extent of
SI5O.OW.OOO that credit is being definitely
ledged.
Neither the White House nor the Treasury
authorities had anything further to say
about the financial situation to-day. Secre-
tary CorteIyou declined to discuss the de-
tails of the Panama Canal bond and the
certificate of Indebtedness schemes. saying
that tho circulars given out last night for
publication in anticipation of their issue
to-day contained all that was necessary.
The plan Of issuing a large volume OF
certificates oR Indebtedness is intended az a
great popular measure. There may be a
large number OF popular subscriptions 10
the certificates. for they will bear interest
ai per cont. but il is certain that the GER
licates will be very attractive to national
tanks, and the Secretary Of the Treasury
will exercise his own discretion as TO the
aoccptnbiIity Of subscriptions. The whole
ilan il to add To the Circula ting medium
oI tho country and the best means will
i,r taken to accomplish this end
tine explanation II the plan to-day was
that the Administration wished 10 appeal
20 individuals throughout the country who
have been Withdrawing their deposits from
the banks and that these individuals would
bc expected to uEe these boarded funds
for the purchase Of the new certificates Of
indpbteduess. To what extent the Secre-
tary Of the Treasury will honor individual
subscriptions for the certificates is not
known. IL is true. of course, that the
Treasury administration would like TO Zee
these boarded funds find their wuy into
the useful channels Of circulation.
The national banks will he permitted to
use the certificates OF indebtedness in
this way. A bank may subscribe for
the certificates in any appropriate
amount. and il the subscription is honored
the bank may retain the purchase price in
it's own vaults a. a deposit Of Federal money.
The deposit thus acquired must be secured.
but municipal. State and railroads bonds.
such are acceptable 10 savings banks in
Massachusetts,. Connecticut. New Jersey
and New York. will he accepted by the Treas
ury Department ~ security.
The same class of securities would not. Of
course. be acceptable under the law a
basis of bank circulation. The purchasing
bank, however, having acquired the Certiii-
Gates of Indebtedness and having secured
with minor bonds the purchase price re-
tanned AZ a Government deposit. may pro-
ceed to issue national bank circulation with
the certificates of indebtedness as security.
The net result of this compound transaction
will be an increase in the volume of circu-
latihg currency equal TO the amount of the
certificates Of indebtedness issued by the
Government
The fact that the certificates OF indebted
ness would be accepted as security for
circulation and for Government deposits
was not made known in the circulars form
ally issued by Secretary Cortelyou and
given to the press in advance last night
The fact that such a course will be pur-
sued came out at the Treasury Depart
nnent to-day. however, and naturally added
much interest to the Administration plan
Of issuing these certificates under the emer-
gency act passed by Congress- In 1903.
Il is provided by statute that only reg
istered bonds shall be accepted by the
Treasury as security for circulating notes
of national banks, and for that reason the
certificates will bear a registration blank,
so that they may be registered by pur-
chasers wishing to use them as a basis
Of bank circulation. The plates for the
certificates are now in preparation and
will be ready within a few days, certainly
az soon a. the subscriptions close at the
end OF this month. The certificates will
he Of the same size as ordinary bank notes
or silver certificates, and will therefore be
convenient to handle. The certificates will
not, however, be legal tender, although
they will be readily negotiable when un-
registered simply by passing from hand TO
hand. The interest will be payable only at
the end Of one year and the last holder
will OF course he the individual who will
receive the interest.
There was some speculation to-day as
20 whether the certificates would command
premium. and the general opinion was
hat the premium. IL any. would never
tNceed the amount OF the interest for one
year. which is the interest bearing life OF
these securities.
The plates for the Panama bonds will
g ready very soon. Less scrupulOus care
is required in the execution of these plates,
as tho bonds are registered only and can
bs negotiated only by transfer on the Gov
trnment books in the name OF the holder.
Already the Treasury Department. has
received applications for part OF the issue
Of certificates of Indebtedness. but TO what
amount the Treasury officials declined 20
say. They are feeling good apparently
over the prospects of a resumption of con-
Edence due to the measures announced
last night, and while modestly reticent were
wiling TO admit that some kilograms OF
Congratulation had been received by Sec
rotary Cortelyou. In the opinion OF the
o..:cials, the very fact that Panama Canal
bonds and certificates OF indebtedness
would be issued 10 the extent OF $3.50 900 900
viii have an excellent effect upon timid
PEOPLE and banks who have been boarding
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