New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1889-10-21

do with it, except as buyers of securities have
taken them up and thus reduced the amount OIL
| brokers' loans and during the last week that has
been done only to u moderate extent.
Bank reserves rs II whole are again nearly
| 100000 above the suppostitious rule OF 20
| per cent II the deposits had been reduced TO
| thc amount that the other changes call for the
so-called surplus reserve would have amounted
| To 81 100000 We do not dispute that money
for la2 per cent Of brokers' leans has been tight
nj about the legal rate but we do assert that
the rates for banks and bankers balances have
| been manipulated for speculative effect We
were the first 30 say so and now, after period
of mental agony to those who first denied
| IT. their strong assertion of the fact leaves us
al liberty to let the artificial conditions rectliy
| themselves.
The bank surplus reserves-the much talked
and written about surplus or deficiency on the
banks of the City of New-York-are bugbcar
used solely for speculative effect on the stock
market and in The interest Of moncy-lenders
During war times when gold was ruling at II
premium of from 0 to 900 per cent the New
York banks held little gold that was not held on
special deposit Their real and only reserve
was the greenbacks which they held in their
vaults. Yet under the law the national banks
were permitted 10 count their gold held on special
deposit as part of their reserve. Over the gold
Which they held they had no more control than
the superintendent of safe deposit company has
over the private box Of any of its dcpostOrS
Yet by the counting OF that gold aS part Of the
reserve the New Ork Clearing House banks seldom,
If ever fell below the % Der cent rule. CaloulAt-
Ing only their true reserve, the grecnbacks, they
seldom rose above 20 per cent and thai including
the State banks in the Clearing House, which ran
along with perfect safety with 10a15 per cent
reserve. Since 1879 the national law requiring
% per cent reserve has been dead letter both
In the Controllers Office and at all welloonducted
banks. Neither is there any Clearing House
regulation in regard IN reserve that oVcrrdcs and
IS more powerful than the national law. All
that is required by the Clearing House is th9t
each member of the association shall promptly
meet and pay any debit balance there may be
against II on any given day. There always are
creditor banks and debtor banks on every days
clcaIances and IT frequently occurs that a State
bank carrying only II or 10 per cent reserve is
the creditor on the same day that aarional
bank, with 30 per cent reserve, Is the debtor
The simple fact is thot the banking business
OF the country where well conducted Is managed
in accordance with rs special business connections,
and not by any arhltr0ry legal enactment One
bank with 10 per cent reserve owing 30 tho
character or Its business may be aud is in q
safer condition than another bank with different
kind oil business with reserve of 80 per
cent. Yet the obsolete national, law Of
% per cent reserve. although from the date Of
its first enactment II has practically been nullihed,
is still held up, like scarccrOw in cOrnfeId for
PURPOSES of intimidation and generalization. The
fact that it can he used is admitted but
the admission is dscreditable to many people In
Wall Street
The foreign exchanges partly because of natural
conditions and partly because Of the quoted high
rates for money AZ the Stock Exchange, were
weak all the way through. With easement In
money, there probably would be some temporary
improvement in rates but the natural conditions
favor mich lower rates before the end Of the
season. even If money at the Stock Exchange
should decline below the legal rate At the close
business done the basis of 81 81 l-2 and
81 81 IL for long and short sterling respectively.
There Is little question that the Bank Of England
rate at the meeting on next Thursday win be
reduced to l-2 if not per cent, because the
| open market rate for discounts had declining
tendency and already is down to 1-2 per cent.
RAILROAD EARNINGS.
The Tribune has printed the gross earnings Of
siXtyf0ur companies or systems for the first week
| in October, showing an aggregate gain Of s742,-
her, fifty companies return gains averaging l 7.Sl
| per cent, and fourteen report losses averaging
| The Tribune has printed the gross earning OF
| thirty.Ouc companies or systems, which show an
aggregate gain Of S33j,54o, or 036 per cent. OF
| the number. twenty-siX report gains averaging
eraging 3 81 Pc cent
The suhisincd tables divide the aggregates and
differences NJ companies showing gains and losses
t weE If Oct iss 1Do ssS 900
Total o. CONS 90 410 so 7O4 Inc s7422o 10 A.
g comp Companies $50 7os 5000 9e5 mo $3.50 29s 1S2
Total 81 CONS 49, 57s5ls s89loo oo Inc eaa55is 08O
TIE WEEK AT THE STOCK EXCHANGE.
| The Stock Exchange market of last week pre-
| spnted perhaps not peculiar anomaly, but still
| il was an anomaly. The market for bonds OF a
| fixed value based upon their rates OF interest
ruled strong all the way through-there were
some fluctuations, which, however, are NOT pfI
| of the estimation OF confidence with which The
| public is a buyer of them. On the other hand,
| ihe stock market, which carries securities Of un-
limited earning capacity was dnIl ana suoIecte99
| to n monetary scare. The two proportions stated
| furnish nearly full explanation of the week
market. Securities holding a maximum OF lndl-
| yidual revenue were strong, while tho underly-
Ing stocks, the revenue from which Is unlimited,
as n rule were lower than they were IN the pre-
| ceding week OF the money manipulation we
before have said all that il is necessary TO say,
| except 10 remark that II the manipulated rates
for money AZ the Stock Exchange were TO be ac-
ceptcd the ruling rates for any prolonged
Period, per cent bonds al above go would n9c
be n good purchase. Advp rScly the same rule
applies to the purchasing of stocks if the manipu-
| lated rates are only temporary there is no reason
| why they should have any effect upon the values
| Of that class OF securities from which individual
revenues are limited only by earning capacity
| Nevertheless, in market where the dealings ore
almost exclusively confined 10 those in contracts,
the higher rates for money last week were the one
| factor. Chicago and st. Louis and other West
crn railway centres entirely dried up in sending
rs mn" about the deplcrabe condition of the
railway situation. We are not inclined 10 be-
licvc that there is any direct connection under
standing between the National banks which have
been chief in the manipulation Of money rate
and the leading bear operators at the Stock FIX
change. But that there las been an under
ground current Of sympathy and knowledge
of what each purpoSed TO do there is not room tC
question.
An unknown correspondent f1vorS MS with
| communication which is so fairly written from his
point OF view as 10 deserve recognition. " T. r.
only repeats the common talk Of Wall Street wher
hr tells us that the agricultural interests of The
| country arr and have been, suffering from low
| pricas for their products and, therefore, have n,
money with which to purchase drv-goodS luXutios
etc He also asserts TINT while the railroad~ have
| plcntv Of stuff to haul out, they have nothing u
| haul back but empty cars. Speaking Of the South
crn planters, the price Of cotton is omitted Ger
tainy not because the price was below the avera q
| Of the period before the war. He closes by say
| ing: The farmers are not buyers in our markets
This is the cause of the bear market in Wal
Street, II the gcntlcman's statements were cor
rect, there would BE- no disputng his deductions
l}ut the fact is that every one of his PREMISE