The morning news. [volume] (Savannah, Ga.) 1887-1900, 1891-01-06
THE MONEY MARKET.
Banker Henry CIews Gives His Views
With Regard to 10.

With Regard TO t.
NEW YORK, Jan. 3.-Henry Clews, in
his weekly financial review. has the follow
ing 20 say about the financial situation:
Although the past weeks business has been
interrupted by the holidays, it has shown q
dis met Improvement in activity and con-
fidence or toe stock exchange. IL has been,
in fact, the only week since the middle of
! October that has shown anything like the
/ old-time feeling.
The causes Of this recovery have not
been trivial, nor are they likely to prove
entirely transient. The last bank state
ment showed an unexpected impro vemsnt
in the bank reserves, the surplus over legal
requirements being s7,7OO,OO0, compared
with s3, 400, 900 for the same week OF last
year, 81 800, 900 In 1883 and 50, O00, 900 in
1887; which shows a fully normal condition
Of this important factor in the financial
situation. These figures in 1icate that, at
last, a reaction in the currency movement
in favor Of this city has fairly set in; and,
Judging from ali precedents under like
circumstances, the rehux is likely to con-
tinue until we have at this center an actual
plethora OF money, with consequent low
rates Of interest. Another cause of the
improvement is the important fact that
about Sl25, 000, 900 of interest and di yidends
is payable at the beginning Of January.
portion OF these payne Is lis always
| devoted TO reinvestment which creates a
special demand for bonds and the better
class Of stocks at this season. Ordinarily,
| this demand is forestalled by speculative
buying early in December; but this year
that buyiug has not been forthcoming; and
prices have consequently had no advance
from this cause and, being exceptionally low.
there Is the more probability OF a rise dur
ing the first half of January. Another
cause OF the better tone has arisen from the
oversold condition of the market and the
unwillingness of the bears" TO face the
| special demand from investors that may be
reasonably expected during the next two
weeks. There las also been a feeling that
the present extrao dinarily low Prices.
| coupled with the easier condition Of the
money market, may induce a certain class
of investors to devote a portion Of their
| January income from securities to the pur-
| chase OF stocks, as a transient investment.
This Immediate recovery in the tone of
market will probably prove to be the be-
ginning Of more important later i'm
| provement. The future ease in money is
| likely to be as decided as the past string
ency has been. u der circumstance, sucn
as have recently occurred the. money market
always quickly reacts from the one extreme
| to the other. Business becomes more or
| less restricted throughout tho county and
prices OF a wide range Of properties de-
cline; and as a less volume of circulation is
therefore eeded. surplus Of money
accumulates in the banks, which, in their
desire to keep the funds employed, have to
reduce their rate of interest When such a
state OF the money market as this arises
| and there exists at the same time a market
| aluation Of stocks some 80 or 40 per cent,
| below their normal value, al outburst
| OF the speculative spirit becomes inevita le
1t is an unfailing rule of experience that,
| when securities have to ched the lowe
| possible point of depression, it is entirely
safe to buy them for a rise, the only condi-
ton necessa v to such an advance being an
abundance of loanable funds, which, in the
present case, is certainly assured. At
| present there are these factors in favor Of
recovery-the weak spots am ing dealers
have been eliminated from the market,
which gives confidence 60 lenders of
money; and the class ofinflated stocks have
had the element of water" squeezed out Of
| them Another very important considera-
| ton in favor of railroad stocks is that the
| great southwesternsystems, either with or
without the proposed combination of
arrangements, may be depended upon to
improve upon their past destructive cutting
of rates; whilst the granger states show a
marked disposition, both in their legisla-
| lures aud their railroad commissions. to
relax the past severity Of their interference
with the management Of the railroads; from
| all of which il is reasonable to expect an
improvement in the net results of railroad
ing from this time forward. Under all the
circumstance, it seems reasonable to con-
clude that an average vance of eight to
ten points upon the present prices of stocks
may be realized before any question can be
reasonably raised as to their market price
exceeding their intrinsic value.
The banks are meeting literally the de-
mand for money from the south incident to
this season, aud hence the currency move
ment with the interior shows a net loss at
New York for the past week of about
81, 500, 900. most of which has been trans.
ferred through the sub-treasury. The ordi
nary transactions between the sub-treasury
and the banks. excluding the money trans
fers referred to, show loss to the banks OF
about $3.50, 000