The Austin weekly statesman. (Austin, Tex.) 1883-1898, 1893-09-14
FINANCIAL PANIC ENDED.
so say HENRY CLEUs & co. IN THEIR
WEEKLY REVIEW.
New York City Banks Closed the Week Con-
siderably Above the Reserve Limit.
Trade Is Behind Finance But rs
Catching Up Rapidly.

owed in our advices of the last tw,
weeks has arrived. There no longe
exists money crisis. The city bank
were, at the close of last week, actu
ally above the legal limit Of reserv
(although the weeks average showed
a slight deficiency, and during tn
past week they have made furthel
gain in currency in their exchanges
with the interior. They, therefore, NJ
longer suffer from the restraints of the
reserve laws, and are on the way
towards further large accumulations
of money. Putting together the i'm
ports of gold, the lew issue of bank
notes and the issues of the United
States notes against silver purchases,
the country must now have some
S75, 900, 900 more currency than it had
at the beginning of the depression.
The boarding by private persons,
by country banks and by saw
ings banks had prevented this
accumulation from affording any re-
lief. Now, however, the hoarders
have recovered, or are recovering,
confidence and are converting their
cash into investments or depositing it
in bank, and this large amount of
money is now flowing into its accus-
toned channels and repositories. We
have therefore now reached stage
that always follows periods OF great
.,I, nj, tltn
unavailable money flows into the Gus
tody of the banks and becomes avail
able for general use. The stringency
produces contraction OF business;
that contraction diminishes the
amount of money needed; and there is
then redundancy of circulation. In
this case, the redundancy will be all
the greater from the fact that the gold
imports and the new issues of bank
notes are to a large extent n special
increment. These facts indicate that
we are now drifting with some rapid
ty TO an unusual glut OF money. The
first essential of a general revival of
business is thus secured. and by pro-
cess which, because it Is natural, may
be depended upon.
Up to this point, however, the re-
covery of confidence in general busi-
sess is behind that which has occurred
in banking and financial circles. 1t is
not 10 be expected that it would keep
equal pace. For the disturbance of
credit among merchants has Teen
more extensive than that which has
been experienced in Wall street, and
the machinery of trade moves more
slowly than that of finance; the trader
moreover always has to wait for the
readiness of the banker. The restO-
ration of general business, however,
cannot be much longer delayed. AL.
ready the beginnings of improvement
branches of trade. There are more
buyers in the markets, and although |
they are making inquiries more than
contracts, it is evident that they are
in need of considerable replenish-
ments of their stocks. 1t is many |
years since stocks of merchandise
have been 80 light as at present; and |
this applies equally TO the retailer,
the jobber, the manufacturer and the
importer The shock of the last three
months OF depression has been too Sc
we're 10 admit OF an immediate aver.
age demand from consumers; but 1t Is |
sale to assume that he reduced abili. |
ty to buy is not at all proportioned TO
the lowness of stocks. For q large por.
ton of the last three month the pro-
duction ofmany kinds of manufactured
goods has been reduced by one half |
and as rule stocks in first hands |
probably do not exceed one months |
mi II m AC \, 10
ton OF supplies VIC have to set off a !
large accumulation of deferred wants |
AID postponed buying together with
restored ability TO buy. The nature of
the depression has been rather tenn
porary impairment of the instruments
of buying than a destruction of the |
real ability to buy. Credit has been |
suspended, not from insolvency, but
from transient monetary disturb |
ance. The monetary crisis having |
been virtually overcome, credit re-
wives, and the ability to buy and to
replenish stocks is restored. The act
ual buying capacity OF the country has
not been impaired at all proportion
ately to the extent of the depression,
and therefore the condition is not at |
all comparable with that which follows
a crisis due to overtrading, specula-
ton, initiation and an extensive preva-
lence OF insolvency. Under these
circums stances, it seems reasonable to
expect that when merchants have
recovered a little more from the late
acute shock brisk revival of business
will set in and possibly with some
recovery in prices from their present |
low level. The recovery is not to be
expected TO amount to II full resump-
ton of the prosperous activity that
existed before the crisis but it is not |
too much to hope that il may prove
much quicker and more complete than
that which usually follows periods of
panic.
Mercantile credits now have the
backing of the banks. The New En-
gland banks are taking considerable
amounts of giltedged paper; and the
city banks are in the market for the
better class of names at per cent.
The resumption of discounting means
the resumption of trade. Naturally,
the prospect of an early reduction OF
tariff duties is calculated to keep the |
production of manufactures close to
the demand. This sort of preparation
however, has, from other causes al !
ready gone as far as is needful in order
n IN nn- tpR IN rtt' al and ii thaf