The morning news. [volume] (Savannah, Ga.) 1887-1900, 1893-06-19
BANKER oLEws' VIEWS.
The Financial Outlook as Seen From
Wall Street.

though the Improvement in tone and con-
fidence that set ir last week is still main
tanned, yet series of small disturbances
have one after another come to the sur
face, which have prevented the reali2a-
ti0n of any fixed and important advance
in the value of securities. Even the most
favorable events seem to have dark side,
which counteracts their influence. The
active forwarding of western produce
the export of gold, has also
had the effect OF drawing very
large amounts of currency to the interior,
and tho local money market has eonse-
quently become unsettled. This demand
for currency, however, seems to have
passed Its climax, and to-day's bank state
ment is likely to show a decline from last
week in the net loss of currency The
western banks appear to have now money
enough to handle the grain movement;
and as two months must elapse before the
movement from this city TO the west sets
in, it is within probability that, in the
course of week or two, we may witness
some return of the currency sent to the
interior within the last two weeks; the
more so as the west will be enabled to re-
init on account Of postponements Of pay
ments to the east that have
occurred under the late ex-
city banks have found some compensat tion
for their shipments of currency westward
in liberal receipts of money from the
south and in a gain of cash in settlement
with the sub-treasury The furry in the
money market is therefore likely TO soon
abate, and may possibly be followed by
some months of comparative ease. Even
should 1t turn out thaa the west wants
still further amounts of cash from this
4
but discouraging For such Withdrawals
mean the marketing of q vast sum of
products, which will ease the loan mar
kets, diminish the tension In credits,
quicken the movements of trade and re-
lieve the foreign exchanges by the trans
fer of SAID products to foreign countries.
The chief trouble In the situation is the
continued extreme stringency in CONNER
cial discounts. This trouble has become
very seriously urgent, and the natural
tendency of the arrangement Is toward
its own aggravation. Each denial of
discount creates an application for dis
count elsewhere; lack of discounts Ia one
section aggravates the necessity for ac-
commodation In other sections; and thus
the disease spreads with fatal rapidity
throughout the whole country. Such a
state of things cannot be allowed to run
long without inviting widespread disas-
ter. Most fortunate, therefore, is 1t
that the clearing house has
decided to attack this malady
at its chief center. In authorizing the is
sue of clearing house certificates, the
banks have not aimed SO much at pro-
tecting their own interests or reserves
except so far as those might be threat
ened through the suffering of others--as
at making common cause for the purpose
of extending accommodation TO the COM
mercial interests. The trade discounting
banks are but portion of the whole, and
yet they are called upon to bear
nearly the whole pressure of this
urgent demand for commercial nc
commodation. In q similar way, the
banks acting largely as correspondents
for interior banks are subject TO an ex-
traordinary demand for rediscounts
and for currency from their country Gus
toners, which greatly intensifes the de-
rangement of credit in all sections.
The issue of certificates makes all classes
of banks mutual supporters of each other
and brings In the help of the powerful
class whose accounts are with the large
financial institutions and with the private
bankers and the stock exchange houses.
The action of the clearing house thus
places the disordered credit situation un-
der immediate control, The Philadelphia
banks have taken n like course: and,
should the clearing houses of the seconda-
ry centers follow the precedent, the dan
gers attendant upon the present strained
condition of commercial credit can hardly
fail to speedily disappear, leaving behind
no doubt a general caution and some con-
traction of business, but no longer any
real danger
The past week scores two very inn
portant gains toward common recovery
of confidence. To one-the action Of the
clearing house--we have already made
reference. The otherls, in broad sense,
still more vitality important. The canvass,
made in different directions, as to the dis
position of members of congress toward
the silver question leaves scarcely doubt
as to bill being passed at the coming
special session repeating the silver pur-
chasing clause in the Sherman act. How
much further congress may be disposed
to go in the way of amending our general
currency system, so as TO make it more
elastic in the way of automatic expansion
and contraction, remains to be seen; but,
so far as respects this most dangerous
feature of the silver element Of our
money, there is hardly room for
q doubt about it's being
promptly eliminated. A larger benefit
TO the country at large could hardly be
conceived. 1t is the doubt as to the
quality of our future money that has had
an important influence in causing the re-
turn of our securities from abroad during
the past year, thereby deranging the
course of the foreign exchanges and pro-
ducing the large loss of gold that has de-
pleted the reserves of both the treasury
and the banks. This doubt being re-
moved, there would be notking TO pre-
vent general recovery of confidence in
our securities in Europe, with the prob
able consequence of return OF much of
the gold we have lost, and a reSulting
restoration of the monetary strength Of
the banks and q general ease In credits.
In view of these facts, we anticipate,
from this time forward, a steady recov-
cry of confidence, which viii gain in
strength with the course Of events and
the nearer approach of the assembling Of
congress. This prospect may not produce
any immediate extravagant recovery in
prices of securities, but it will very legiti-
mately strengthen the feeling of holders
and should hold the pessimist operators
in check.