The morning news. [volume] (Savannah, Ga.) 1887-1900, 1893-09-11
BANKER cLEws' VIEWS.
The Financial Outlook as Seen From
wall Street.


arrived. There no longer exists a money
crisis. The city banks were, at the close
of last week actually above the legal
limit of reserves although the week S
averages showed a slight deficiency, and
during tho past week they have made d
further gain of currency in their eX-
changes with the interior They there
fore no longer suffer from the restraints
of the reserve laws, and are,On the way
towards further large Accommodations Of
money Putting together the imports Of
gold, the new issues of bank anotes and
the issues Of United States notes against
silver purchases, the country must now
have some $50, 900, 600 more currency than
it had at the beginning of the depression.
The boarding by private persons,
by countay banks and by saw
lngs bankers had prevented this
accumulation from affording any relief
Now, however, the hoarderS have rCcov-
cred, or are recovering, confidence and
are converting their cash into invest
ments or depOsiting it in bank, and this
large amount of money is naturally flow
ing into its accustomed channels and de-
pOsitories. We have therefore now
reached a stage that always follows
periods of great stringency, at which the
previously unavailable money flows into
the custody of the banks and becomes
availa BILE for general use. The Stringcncy
produces a contraction of business; that
contraction diminishes the amount of
money needed and there is then a reduu-
dancy 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 ex-
tent a speci3l increment. These facts in
dictate that we are now drifting with
some rapidity toward an unusual glut of
money. The first essential of a general
revival of business is thus secured, and
by process which, because it is natural,
may be depended upon.
Up to this point, however. the recovery
of confidence in general business is behind
that which has occurred in banking and
financial circles 1t is not expected that
it should keep equal pace. For the dis
turbance of credit among merchants has
been 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 restoration of general
business, however, cannot be much longer
delayed Already, the beginnings of i'm
prOvement are apparent in all the leading
branches of trade. There are more buyers
in the markets, and although they are
y.
is evident that they are in need of consid-
cradle replenishments of their stocks. 1t
is many years since stocks of merchandise
have been so 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 severe
to admit of an immediate average demand
from consumers; but 1t is safe to assume
that the reduced ability to buy is not at
all proportional to the loWness of stocks
For a large portion of the last three
months, the production of many kinds of
manufactured goods has been reduced by
one-half, and as a rule stocks in first
hands probably do not exceed one month
consumption. As against this condition
of supplies we have to set off large aC-
cumulation of deferred wants and post
poned buying, together with restored
ability to buy. The nature of the depres-
sion has been rather a temporary impair
ment of the instruments of buying than a
destruction of the real ability to buy
Credit has been suspended, not from in
sOlYenCy but from transient monetary
disturbance The monetary crisis having
been virtually overcome, credit reyives,
and the ability to buy and to replenish
stocks is restored. The actual buying
capacity of the country has not been i'm
paired at all proportiOnately to the extent
OF the depression and therefore the CON
dition is not at all COmparab BILE with that
which follows q crisis due to over-trading,
speculation, imitation and an extensive
prevalence of Insolvency. Under these
circums stances, tit seems reasonable to eX-
pect that, when merchants have re-
covered a little more from the late acute
shock, a 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 10 amount
to full RESUMPTION Of the prosperous
activity that existed before the crisis
out it is not loo much to hope that it may
prove much quicker and more complete
than that which usually follows periods
of panic. Hl.
Mercantile credits now have the back
ing of the banks The New England
banks are taking considerable amounts Of
gilt-edge paper, and the city banks are in
the market for the better class Of names
at per cent, The resumption of dis
counting means the resumption of trade.
Naturally, the prospect OF an early re-
ductiOn of tariff duties Is calculated to
keep the production of manufacturs close
to the demand This SORT of preparation,
however, has, from other causes, already
gone as far as Is neCdful in order to meet
The tariff changes; and all that is re-
quired to keep use markets in a fairly
healthy condition is to see to it that pro
duction is kept We'll within the limits of
a moderate normal demdnd, which, with
the prevailing caution among manUfac-
turers, may be safely calculated upon.
The pangs of preparation for the new
tariff having already been virtually en-
dured, the only remaining question to
cause much concern is as to the extent of
the reductions of duty AS to this, there
is reason to hope that the administration
may favor a more moderate policy than
might have been attempted under other
circumstances.
The final repeal of the purchase clause
of the Sherman act is now so generally
taken for granted that the silver question
no longer causes any serious apprehen-
sion Congress, however shows such
decided disposition to reshape our cur
rency system that there can be little
doubt that when the Senate has given
its vote against silver purchases, the
problem Of amending our bank note sys-
TEN will receive earnest consideration.
The decidedly preponderant opinion OF
Congress seems to favor bank circulation
as the chief future dependence Of the
country for its retail uses. Some notable
changes Of opinion from old methods Of
regulating and protecting bank issues ap-