The Montgomery advertiser., 1907-11-20
CABINET IS
 GRATIFIED
 --e-- Roosevelt and Cortelyou
 Are Congratulated. SITUATION FAST CLEARING New Bond Issue VIII Be Over
 subscribed. Question Has Been Raised as ts whether New One-Yesr CertIfi- cates win Be Available Fer Bank Reserves.
SITUATION FAST CLEARING

< Washington, Nov. 1s--The communi- eations which came to the Treasury Department today, approving the financial policy adopted by the Presi- dent and Secretary Cortelyou and the subscriptions which were received for cates. were the subject of discussion at the meeting of the cabinet and af- forded general qualification.
 While details regarding subscrip- tions are not yet being made public. ft seems to be the feeling at the treasury that both loans will be over-subseribed as was the case with the popular loan of sf00,00o. 900, issued by the Cleveland administration in 1896.
 The decline in the stock market fc- day Is regarded as only, symptom of hesitation until the effect of the faiI- ure or success of the measures are proved by the opening of bids. Several questions are being raised in ths conn munications addressed to the treasury but the treasury officials are oxercis- ing an unusual amount of care in de- fining their position. One of these questions wpon which no official in formation has yet been given. is whether the new one-year certificates will be available for bank reserves. The law on the subject seems 10 he sufficiently clear that they are not available for this purpose but 1t Is pos- sible that the presence of Q few of tions would be wfnked at just as fn the case of the clearing house certifl- cates.
 It is prescribed by section 5isf of the revised statutes, that banking re- serves should be '.in lawful money of the United States. This can only mean gold and silver coin, coin certiii- cates and legal tender notes. The fa~ does not even permit bank notes which circulate as currency to be counted d reserves. although small amounts aFs occasionally included In the same pack ages with the lawful, money. As . large proportion of national banks are now being permitted to do buRinaKa with their reserves considerably Fu- diaced below the legal limit, tr4 dstes- ton whether the prop6eed treasurs certifcates shall De counted as Fe- serves or investments Is practically only e matter of bookkeeping. fS f The law is framed. however. to re- ouire actual money to be held in re- serve and those familiar with the cur rency systems of other solvent coun- tries, declare that 1t would be entirely contrary to sound policy to count an interest bearing certificate of debt as the equivalent of money under normal couoltIouSs n poAtCy oA hooeENo .LS oo- ing pursued by Comptroller RidgeIy apparently for the purpose of avoid ing any unfavorable' impression among the bankers or misunderstanding by the public pending the opening of bidi for the new securities
 If the certificates are redeemed al the end of one year. according to theil terms, 1t Is believed at the treasury that there will be no dificulty in with drawing money from the banks foi the purpose at that time because mon ey usually accumulates rapidly Tn tne hanks after the first furry of crisis has passed and as general business speculation become curtailed.