Show SECRETARY SHAW READS LESSON IN FINANCE TO T NEW YORK BANKERS I NEW YORK Oct 1 Secretary t. Shaw gave out the following statement I yesterday The department Is In re receipt receipt receipt re- re of ot a large number of or r requests from various orous banks In the country cl clearly showing clearly arly showing that the statement glen given given gl en out last night was misunderstood or rather that It was 18 not carefully read That there may be he no misunderstanding misunderstand ing InS the following statement Is made No io new deposits s will wil b lu hA made on any security other than Government Go bonds so IO long lone us as Government nt can bo be tC- tC be- be cured For the pr present tnt banks hankA H seem em to be beable beable beable able to obtain frequently by hy borro borrowing In bonds bondY other than thun 2 per cen They can cnn obtain time tle US use of ot these bonds for a limited period and the they ur are as aH desirable as any m for tor security for deposits deposit They hey arc not hot as al desirable as security for to or circulation tion ton for tor thu tho reason raMn that circulation hOled th thereon r on Is taxable at 1 per c cent nt while pe circulation based on the 2 per c cent nt con con- sols cola Is taxable at only one half of oC 1 per percent cent cent Th The banks cannot obtain except h by purchase purchase pur pure chase any bonds OB OR n R basis for tor circulation when deposited for circulation I the they cannot bo be bl r released h until their circulation circulation cir clr- cir cir- Is retired and amid It I mn may take a ayour 1 your year before their circulation can be he re retired retired r- r re- re tired trel and nd the price prie of oC bon bonds ts Is so 60 high that hank bank circulation Is maintained at considerable loss inas 1018 to the lie banks Thc They must be encouraged o or 01 circulation constantly constantly con con- contracts I tanty Therefore the department has decided to io rt release 3 for such Luch banks as K have ha deposits de do- A Apo po posits and C mire ure not maintaining their limits IM of circulation a portion porton of ot tho bonus bonds I I now no held by ly the tho Government Go taking tak tak- lug ing In lieu thereof other HO- HO 1 gurity on nn leu condition always that time tho bonds irinda curly r released will wil h bo ta used for th ho Immediate issime of ot additional circulation This Thil pru- pru Ilon does not apply to tn thol those banks that lint already have hn th their lr maximum circulation neither doe dOR It l apply to lo banks auks that do not lol dr have hn e any The sole purpose e of oC the offer orter Is 11 In to In- In cre cresO en circulation that Is It already nna ready to be bo I ul and by banks that have o hl already the bonds oy on ol deposit Th n deposits being scattered throughout the tho entire tho tIme relief offered It I is believed cd bele will wi b be national rather than local I fur ur or It U applies to mill ull ul l sections of th the cou coun country try Iry and to every fH State tc In th the Union That the Secretary has haB Intended all al alo alon that hat the r relief lct should be general and for lor or the Vest West as well wel as New York was wa shown by a remark he made In ex explaining ex- ex how the tile effect would be Immediate Im ha- mediate In New York He lIe le explained n again aln how relieving relle the banKs banh of or the necessity of oC carrying reserve Immediately Immedi gave e a them the opportunity to extend extend ex ex- tend credit to four tour times the reserve re re- re leased You ou see sec he continued your our r o New NewYork NewYork York banks hanks do not care anything for forcash cash cash they they do their bu business by hy means of or credits Time The loans and depo deposits lt are In the form of o checks and bookkeeping and all al the thc they want Wilt of fC if cash cush IH is to maintain maintain main main- tain lain their reserves reserve I of ot Increasing Then what JH is 11 th the use uge circulation was asked Oh replied th the Secretary instantly instant instant- ly your our banks here do dl not do o alt all al tho time business When It comes conies to the Western West West- est em ern orn banks bank when the they want to aloan n it loan for the purpose of oC paying for cattIe catte cattle cat cat- tIe tle te or grain the they have got to pay payout out the actual currency The They do not do doso doso 10 so o much Juch of oC their bu business ln on 01 books That Tha t I Is where the cash Is needed and nd the they call cal on th the banks Here for tor It I. I |