Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1907-11-29
GLUT Of MONEY
MARKET NOW
FE A R Ed
BANKERS SEE DANGER
OF UNDUE INITIATION
Action of Cortelyou in Stop
ping Sale of Debt Certificates
Taken to indicate End Of Fl
nanciaI Crisis.
;sy Morning Journal special Leased Wire ]

| iBy Morning Journal special Leased Wire.i
| Washington. Nov 2S.-The an
nouneement by Secretary Corielyou
last night that further subscriptions 10
| the one-year treasury certificates
| would not be received IL regarded here
as indicating that the secretary con-
slders the crisis In the money market
10 be practically over. official fig
ures have not yet been given out at
| the treasury OF the amount Of the cer-
! tificates allotted, nor has u been
stated whether further alotments
would be made for subscriptions al
| ready received. The amount of the
| allotments made, however Is said 10
| be about $37 .000. and this Is
probably the limit unless strong rea-
sons are presented from banks which
have already made subscriptions why
allotments should be made 20 them.
As these issues will he retired within
| less than year, they will not consu-
tute a permanent initiation of the bank
note circulation
The effect OF the new loans upon
the future of the treasury resources
and of the money market. Is already
receiving attention at the treasury and
in banking circles. From present
sources of Information The amount
nominally added TO the cash balance
of the treasury will be about SS5, 000,-
600, $45.O00,000 viii represh 1t the
new Panama bonds, and the "35,O00,-
000 will represent the one-yei..' certifi-
ates which have been allotted. This
amount will increase the present nom
lnal balance from about s241,393,217.
where II stood yesterday, to little
more than 1926. 100000. A small ad-
ditional amount will be derived from
the premium on the Panama bonds.
but even II this should average as
high as per cent. II would amount to
only $2,500,000.
With a nominal balance, however.
of more than 1925, 600, 600. the treas
ury will not have anythira5 Ike that
amount Immediately avaHylac This
Is because Of the deposits In national
banks and other deposit items These
items amounted yesterday to S234,-
939, 9,5S9, leaving an actual working
balance of $6, 6,463.62S. The secretary
has announced that 80 per cent Of the
payments for Panama bonds will be
left in the custody of the national
banks purchasing the bonds. and
about I5 per cent OF the payments of
the certificates Will be left with the
banks. With the effect of these
changes i'm the treasury balance sheet
upon the basis OF issues of both classes
of securities to the amount of $751;
00O, 600 will be to increase the amount
in banks to about $500, 600, 900 and
the working balance to about $22 000.-
600 The Increase of S14,000,000 In the
working balance will be due to the re-
tention in the treasury OF five million, |
or 10 per cent of the principal OF the |
Panama payments, and about nine |
millions, or 25 per cent Of the prin- |
cipal of S35, 100000 in treasury GER
tificates.
This condition OF the treasury fin
4. 4 II.
the spring If Secretary Cortelyou Is |
able to carry out the program OF re- !
firing a considerable portion of the |
one-year certificates before maturity. /
He win have no difficulty In doing |
this and saving a considerable proper
tion of the interest to be paid on them /
n the agreements made with banks to
this effect can be carried out under
the conditions of the money market
existing In the spring. IL 100000. 600
of certificates can be then paid off,
the cash balance will fall TO about
1896. 900. .000. deposits In banks will /
decline by three quarters of the
amount paid off or to S277.5OO. 600,
and the cash balance will fall to about
SIS goo, 600. The loss in the cash bal
ance will be due to taking from the
treasury cash OF 20 per cent Of the
amount paid for the retirement Of the !
1
ever, that money market conditions
viii be such that the secretary will
feel justified in calling upon the banks
FOR considerably more cash than
comes to them In payment Of the
treasury certificates which are called
IN and surrendered. Under these cir
while the general balances
would remain the same, deposits In
banks would be reduced. and the ac- !
-ual working balance would be in
'reased. IL Is not only considered
highly desirable to reduce deposits I'm
he banks as soon as money market
permit. but Il Is believed
hat there will be little difficulty in
loing so. II the treasury can reduce
.hese deposits to the neighborhood Of
) 200. 600, 600 in the course of the
pring. il will then have at its COM
nand about 500. 100000 as work
ng balance. from which deposits q
,ould be made from time to time 10 q
lid In the crop movement In the au- !
umn, If they were required. The pre- }
'ious history Of crises has shown that |
money tends to Accumulate rapidly in I
he banks after the worst OF a crisis {
$ over. G
In 1898 the specie In national banks 4
ell from s2O7,222.141 on May 4. 20 $
e6,761.173 on July ~. The worst a
freak on the stock exchange occurred n
July 20. when on call money went to S
s rer cent. Notwithstanding that de- G
'ression in business was still acute a
md the contest over the sherman act
vas still raging in congress at the be- n
'inning Of October. the relaxation Of q
business activity led to the decline OF v
oans on October 3. 1898, by about G
175. 700. 600, and this had its logical s.
equence IN the accumulation OF spe-
lie in national banks Co the amount %
.224 703. $50. or an increase Of about
3s. geo. 600 from the low point shown L
" the bank reports In six weeks q
more. or by statements 0f December \
S. 1893. specie In national banks had -
to s2S7.5i3.6fS. or by near Il
y $4,000. 600 over the low point. The +
anking community deals now with o.
much larger aggregates. the specie in n