The Washington herald., 1910-11-20
TREASURY ISSUES
NEW DOLLAR NOTES
Crop Demand Forces Secre-
tary McVeagh to Act.
CALL 1907 ACT INTO EFFECT
VIII Take Place of s75, 100000 of
Large Denomination Notes-TO Be
Issued Immediately Monetary
Commission 10 Recount So Gold
Notes-Subject for study.

The crop-mOVing demand for notes or
small denominations has been unusually
pressing this year and the Treasury has
been meeting with some difficulty in fill
ing acquisitions OF the banks for the de-
nominations they have needed in order 10
supply their customers with notes avail
able for hand-to-hand payments. To re-
lieve the situation the Secretary OF the
Treasury has awaited himself OF the au-
tbOrity contained in the act OF March 4.
1907. to issue United States notes OF the
denomination Of 81.
That act provides for the issue OF Unit
ed States notes OF denominations undeg
$40 II in the opinion Of the Secretary Of
the Treasury the silver certificates OF
the denominations OF ST. s. and S. shall
be insufficient TO meet public require
ments. Some time since in pursuance OF
this act the Treasury resumed the issu-
ance Of S legal tenders Under the same
authority 81 United States notes will be
issued In place OF United States notes OF
the denominations of $40 and upward.
There are 600 of the latter out
| standing. The change can only be eff
fected gradually as these notes or higher
denominations are presented 10 the
Treasury for redemption
Redemption of Notes.
The average rate Of redemption Is un-
derstood to be something like 81 10000 a
month. 1t is probable. however that
notes will be very actively exchanged as
/ the result of the decision 10 issue 81
notes. and something considerably above
/ the monthly average hitherto prevailing
should manifest itself between now and
/ the end Of erop-moying. After the crops
/ have been moved there will be a still
/ further demand for small currency incl
dent TO the holiday trade This viii no
] doubt be fully met as the result OF the
new policy OF issuing 81 legal tenders.
J There will be no delay In issuing the
new ones, such as might occur II plates
were required to be engraved for this
| Issue. Prior 10 the act Of March H. 1900
! United States notes were issued in de-
nominations as small as 81, but the
| changes made by that act for the pur-
pose of giving as wide a field as possible
for the circulation OF silver certificates
| required that United States notes be
! issued in denominations OF not less than
SO The old plates have been retained at
the Bureau of Engraving and Printing
and are available for notes issued in ac-
cordance with tie act of March 4 1877.
Increase Each Year.
The amount OF United States paper cur
reney Of the denominations of SO and
under outstanding on September 80. 1909.
was 1851, Gss. 2ls, while on September 30.
1910, it was 1913, 475,5Ts, showing an in
crease during the year of S.. 1850 This
large increase in a single year, coupled
with the effort now being made by the
Treasury 20 furnish additional small bills
suggests a rapid exhaustion of the sup
ply OF large bills These latter, because
o. their convenience. are mainly effective
in bank reserves. II is the practice OF
the banks to accumulate large bills for
this purpose. At some point, therefore
the demand for smaller bills must en-
counter this demand for large ones. This
situation has led to the consideration OF
still other means for Supplying the coun-
try with notes Of small denominations.
II Is thought by some that II Congress
We're 20 authorize an issue Of gold GER
tifieates in denominations Of S the future
would be pretty well provided for. In 5,
far as smaller currency is concerned
Another suggestion relates TO the repea
OF that portion of the act Of March Il
1900. which prohibits a national BANKING
association from issuing more than one
third OF its circulating notes In the de-
nomination of s.. The object OF thi;
limitation was TO give as clear a field a.
possible TO the silver certificates. but 4
IS now argued that the increase in popu
lation and advancement in business since
1900 has practically done away with thu
reason for the restriction imposed at tina
! time. Suggestions OF this character vii
probably be considered by the Monetary
, Commission before they are taken up b!
Congress.
: Subject for study,
{ The subject Is worthy Of serious study
for 1t raises the question as to what tn.
? effect eventually viii BE upon bank re
serves. Should too large a proportion O
the money available for bank reserves b.
assigned to the field which is occupied b.
! money constantly IL circulation, Their
might be some impairment OF the suppl.
necessary always to be maintained il
bank vaults.
IL has been eontended in the past tina
gold certificates of the larger denomina
fions have a tendency TO remain in re
e serve. while there might be A tendenc.
for gold certificates OF smaller denOmina
lions to remain in pockets. The govern
! ments policy in recent years has beel
: based upon the theory that to eneourag
the use of silver certificates In active cir
! culation would tend to make the world
recognized reserve money. gold or IL
: equivalent, gold certificates. more readil.
available TO banks for this importan
basic function.
A Mexican movement TO encOurag
9 fruit raising is announced. the plan be