The Washington herald., 1908-01-30

made, and from financial point Of view
he felt justified in making the issue, not
Withstanding the amount Of revenue
within the possession Of the government.
The chief consideration in limiting the
bonds TO national banks above certain
amount allowed Individual bidders, he
says. was the desire TO have the bonds
used as a basis for circulation. instead Of
merely as an investment for individual
funds. at q comparatively low rate Of
interest
Speculation Danger.
Another consideration, however. was the
suspicion, which the Secretary deems to
have been justified, that the Individual
bidders for large amounts sought to Sc
cure the bonds merely as a speculation,
with The object of selling them ultimately
to banks a a premium. He adds.
White the national banks to which
awards were made actually took mp and
paid for S2Lf8sG and left unpaid for
$5l9,iSe. or only a little more than per
cent Of the awards, the S325 eco awarded
70 individuals were taken up and paid for
only TO the amount OF sl5s, 100. and $3.50.
or considerably more than half were not
paid for and remain on the hands Of the
Treasurer. / Even Of the amount taken Up
and paid for only ysl so were issued, in
conformity with the Instructions Of the
bidders, directly 10 them. In other cases,
10 the amount Of $6l, 800, directions were
gwen % deliver the bonds 10 national
banks, who made the actual payments.
Hence Of the small amount awarded 10
individuals. only about q per cent proved
TO be bids to obtain bonds for invest
ment."
Restriction Of Certificates.
While the certificates, owing to their
short term Of life. did not make them
good material for speculation. the Sec
rotary says. it was decided to limit them
TO national banks on two considerations
that The desire 70 stimulate the cireuIa-
ton OF bank notes for a period which
would relieve the crisis and the fact that
the announcement Of the intended issue
had already TO a large extent accom-
plished the purpose for which the issue
was TO be made.
Despite the fact that the bonds were
issued TO banks making the highest bids
the statement continues, the result was
that they were distributed in forty Of the
forty-six States. The certificates were
distributed less widely, because il was
found possible 10 limit the issue before
the date set for ceasing 20 receive sub
scriptions- Yet the certificates were taken
IN at least eighteen States in different
parts OF the country. The decision 20 re-
strict both issues below the amount orig
mally announced he justifies on the
ground that such action was in the in
terest Of preventing an imitation of the
currency beyond actual needs of the
situation
Distribution of Deposits.
The Secretary gives figures showing
that the percentage OF deposits in New
York of public funds, In relation 10 the
banking capital Of that city. was but
one-fourth Of the ratio in other parts OF
the country in the same relation. He
says.
While the Secretary Of the Treasury
felt compelled, IN order To meet the ex-
lgencies Of the situation. to increase de-
posits largely in the backs Of New York
City even the proportion left in their
custody after the panic had subsidized was
smaller than the proportion in certain
other cities and States. A table appended
10 this report shows the distribution Of
government deposits on the date Of De-
cember Z. 1901. by State and by sections
Of the Union.
These figures show that the amount
of public deposits on that date in the
entire country was 500. 352 So which
amounted 10 15.3 per cent of national
banking capital and surplus. amounting
to SI45l,2s5,3 55 While the banks Of the
state Of New York appear as holders OF
public moneys To the amount OF 26S per
cent OF their capital and surplus. tbs
banks Of New England, Eastern. and
Middle Western States, taken as a whole
and including New York. show q percent
age of deposits to capital and surplus of
only little more than - per cent
The banks of the Southern. Western
and Pacific States, on the other hand.
show a proportion Of nearly IS per cent.
With the elimination OF New York from
the Eastern group, the percentage Of the
remaining Eastern and Middle Western
States is only about H.