Evening star., 1907-08-24
SPREADING OUT CASH
Secretary CorteIyou's Plan to
Relieve Financial Stringency.
BUFFERS BREAD EVENLY
Net Shaking Down All the Plums for
New York.
MAY USE ALL THE CUSTOM FUNDS
Thought New Scheme Will Help Home
Situation and Regulate Gold
Exports as Well.
MAY USE ALL THE CUSTOM FUNDS

| NEW YORK, August 24.-Secretary of the
Treasury Cortelyou announced yesterday
| new plan of depositing government funds
| in New York, Boston and other cities to af-
ford relief to the money market in the ap-
preaching crop-moving period. Secretary
Cortelyou will, commencing next week,
place each week, at such points in the
country as he shall designate, government
funds to such amount as he deems suff1-
cient to prevent an acute monetary strin-
gency and possible panic when the demand
for money Is greatest at the height Of the
crop moving period
The plan of the Secretary for monetary
relief is new to the financial world, and one
which he believes will prove more eficacious
than the old method of the Treasury De-
partment in waiting until the country was
severely shaken financially and then COM
ing to the relief at the last moment by plac-
ing a large deposit of government funds in
New York banks. Secretary Cortelyou did
not state how much money he would deposit
each week. though he indicated that the
amount would equal the situation.
The Plan in Detail.
The plan for financial relief was made
statement:
SSSiStoAy Soilc dHHOuuCSO lOudy
| that beginning with next week the Treasury
Department will make each week. for q pc
I riod of not less than five weeks deposits in
/ national banks at New York, Boston and
other points, the security required to be ap-
| proved state. municipal and railroad bonds
| acceptable under the existing requirements
of the department. with the understanding
| that If called for such deposits shall be re-
| turned after January 1 next in installments
to be fixed by the Secretary Of the Treas
| ury.
! This action is taken to meet the COM
| mercial and industrial needs Of the country
at this season, and is believed to be prefer
| able to waiting until a time of acute strin-
| gency, when the only alternative would be
a large general deposit The latter policy
| the Secretary desires to supersede by one
which shall have as its ultimate object the
adjustment of the operations Of the Treas
| ury Department as rapidly as may be prac-
| ticable under existing law, in such manner
as shall preclude their being in any sense a
disturbing factor in the business world
Result Of Close Study.
| Secretary Cortelyou developed the new
plan for the relief Of the money markets
| after a long study Of the many problems
| to be considered in the adaptation Of a
method so entirely different from the one
that had been followed hitherto. The plan
| is one which the Secretary hopes will find
general favor in the financial and business
|
at his summer home. in Huntington, L. l.,
| on the developments in the worlds money
| marts, and he decided to take action at
once to preclude, In SO far as he was able
under the law, the possibility of panic this
coming fall. when the west is drawing
| heavily upon the east for funds to move
| the crops.
Secretary Cortelyous plan is all his own.
| and he consulted with no one regarding it.
He has made a careful study Of the crop
| moving stringency, and after mature
l iIa,~, tto1 nf $la = l~lIo 4
| that the interests of the business world
| would be best conserved in the next few
| months by the depositing Of government
| funds at various points throughout the
| country each week and in amounts large
| enough to ease a tightening money market
| Investigation Of the results attained under
| the old Treasury plan of waiting until the
| last moment and then placing large sin
| gle amount of government funds in New
| York disclosed to Secretary Cortelyou that
! as rule, the placing Of a large amount Of
| money. while 1t really helped, was general
| ly i'll timed and either came too soon or too
| late.
| May Use Custom Funds.
Under the new plan the Secretary will
place government funds in amounts large
enough to meet the situation. For this
purpose he may use all custom funds,
| which he Is permitted to do under the
Aldrch act and il these funds are not
sufficient, he will augment them from the
available Treasury balance; which in
| creases each week after the usual July
| deficit.
The Secretary in placing the government
| fumes throughout the country will depend
| much upon the bureau recently established
| in the Treasury Department to inform him
| when stringencies are being felt most. In
| this way the funds of the government will
be deposited where they will effect the
| greatest benefit. Secretary Cortelyou be-
| lieves that by not announcing in advance
| the amounts to be deposited he will pre-
| vent spectators from taking advantage Of
I the situation and obtaining money which
| he believes should go into other channels.
| In adopting this plan the Secretary gave
| careful consideration to the question of
gold exports, and he is of the opinion that
| the present measure of relief will do much
| to prevent a movement of gold to Europe.
Too Violent a Reaction.
In previous years the sudden outpour Of
| money from the national Treasury when a
| crop-moving strngency was absorbing all
| available funds produced a sharp relief
| and made a gold export movement possible
| by the very violence of the reaction.
| The present financial situation has oc-
| cupied Secretary Cortelyous attention for
| some time and he is doing what he can
| under the law to bring monetary relief.
| Notwithstanding a heavy demand for the
| $50, eco Panama bonds. which are still
| unissued. the Secretary declines to place
! them on sale at this time, the govern
| ment does not need the money, and their
purchase by the banks and public would tie
! up additional millions at a time when the
| money is most needed elsewhere.
| Secretary Cortelyou hopes that his new
plan will be received favorably throughout
| the country, for he believes that 1t will do
| much to alleviate the strain on the coun-
| try's money market.
! The Secretary will remain at his home,
| in Huntington, until after the hot weather,
and he has sent for his secretary to aid
| him IN the rush of work which he expects
| Will develop from now on.
GASOLINE LOCOMOTIVE TESTS.