New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1893-06-30
BANKS BREAK MONEY RATES.
LARGE RESERVES SET FREE.
OVER sc, ,ooo.o CLEARING HOUSE CERTIFT-
GATES AUTHORIZED.
TROUBLE AvERrED-ExTREME MONETARY
sTRINGENCY THREATENS cRAaH-
CALL LOANS FALL TO PER
CENT REMARKABLE DE-
PRESTON IN SILVER
PRESTON IN SILVER.

CENT - REMARKABLE DE-
PRESTON IN SILVER.
By bold and decisive action the leading down
town banks yesterday broke tremendous strain
upon the monetary situation, and paved the way
for satisfactory completion of the settlements
Of dividends and interest usual to July l. For
two hours in the morning the money market was
in a condition where the most serious conse-
Guenccs were feared. but by concerted moyc-
nent several OF the banks thrcw food Of funds
into the hands Of borrowers and relieved the
tension, which had been the most acute that fnsn-
cia circles had fe.t in many years
The relief was given in the face of further
Generalization in silver values, and il is believed
that its effect will he felt far in to-ddys busi-
ness as TO remove the dread of panic which has
been uppermost in the minds OF many bankers
and brokers' severe pinch in money rats
may not be avoided in the circumstances. but
the banks have demonstrated their power to con-
troll tho situation and they will not hesitate to
exercise this power again to-day if it is necessary
The knowledge that solid wall is 20 be pre-
scnted against tho pressure Of dstrust will in
itself. it is confidently expected 90 far to lessen
the adverse force.
REVIEW OF THE SITUATION
The results of the day Justify the foresight Of
tie Clearing House Association in voting Juno
I 3 to authorize the issue of Clearing House loan
certificates upon sound securities deposited by
solvent institutions. That legislation gave the
hanks means which could instantly be resorted
to in crisis like that Of yesterday. To UNDER
stand the monetary stress. brief review Of tho
general situation must be given.
The growing currency disturbances Of the last
few months had produced an enormous contraction
Of credit the country over. New-York had been
depleted Of millions of cash to help sustain the
financial fabric at Chicago, Minneapolis. San Fran
cisco and other important places in turn. This
unfortunate condition Of affairs had shown but
little improvement when this city confronted
with the necessity for preparing to meet the shift
ing OF loans and temporary locking up of money
that are preliminary to the disbursement Of mill.
ions of dollars in interest and dividends due July
from railroad and other corporations and many
States and municipalities. In ordinary times these
preparations adversely affect the money market
for few days, hut they had to be carried out at
this iuncture in the face Of prevailing dstrust and
disturbance. Millions Of dollars re represented,
too in the notes of merchants maturing about
this season. whose assets, while ample to protect
all liabilities, could not be instantly converted
into cash if payment had been insistel upon. To
aggravate the state Of affairs. the announcement
came the Of the July settlements that In
dia had ceased the free coinage Of silver immedi.
ately demoralizing the price Of the white metal
and disturbing all interests connected with silver.
MUCH DIFFICULTY IN SECURING FUNDS
! The comparative quiet of the stock market yes
terday morning feebly reflected the intensity OF
the monetary strain, and the excessive difficulty
met by the most solvent individuals and concerns
in securing funds necessary TO meet possible and
assured demands due tomorrow. Silver suffered
extraordinary depression, and values Of securites
fell sharply at the Stock Exchange. But the call
loan market was the barometer that told Of the
monetary stress. The demand for money quickly
carried rates to l-s per cent commission and legal
interest or equivalent to 81 per cent per annum.
The bulk of the business was done at these figures
but the rate went higher until II touched 3-ls
commission and interest, about 73 per cent
year Even these rates failed TO reflect fully
the scarcity Of funds With money borrowers il
became question, not of the cost of money, but
Of ability to obtain it at any rate. At this
uncture Howard p. rockingham, well-known
money broker rushed into the money crowd on
the floor OF the Stock Exchange and began offering
hundreds of thousands OF dollars. Soon other
brokers actively competing in Offering funds
and the Stock Exchange realized that several
millions OF dollars were newly available from the
banks. The rate for money broke rapidly until
it had fallen TO per cent, and the stock market
rallied sharply with the shorts in rapid retreat.
HOW THE BANKS RELIEVED THE STRAIN
| 1t was learned subsequently, that the monetary
relief had come from the public-spirited action
of five of the prominent banks. These were tho
| First National. the Chase National, the Fourth
| National. the Gallatin National and the Corn
Exchange Bank The presidents Of all of these
banks, except the First National. are members
Of the Clearing Horse Committee. and also OF
| the Loan Committee. whose duty is 10 pass upon
| applications for loan certificates. These men-
George f. Baker. Henry w. Cannon, j. Edward
Simmons. Frederick d. Tappen and William A.
Nash-held a consultation and decided to throw
their resources into the breach The banks ut
once utilized their cash reserves to supply tho
furds needed. and then applied for Clearing
House certificates to cover the debit balances
that will result to them in the Clearing House
settlements in the morning Only by this lin
eral use of bank reserves could the strain bo
broken.
1t is understood that these banks agreed to
take out certificates necessary 20 release their
reserves in the following proportions First Ma
tonal Bank, 80! !OO,0 o: Chase National, 81 ,5OO,-
600: Fourth National. 81 900, 900; Gallatin Na-.
t:onal and Corn Exchange b,nks each, $500, 300;
total, sc, 1000. OOO None of the banks is in Q
position TO require a resort to certificates In
conducting its own affairs Two Of them-the
Fourth and Gallatn National-did not take
out certificates in the Barring panic Of 1900. Nor
is the policy intended to be permanent one
1t was adopted to relieve the congestion peculiar
to the monetary situation this week. and when
the strain of the July settlements is over largo
proportion of the certificates now issued will
probably he retired. There was general relief
in Wall Street when the stand taken by tho
banks became known. and praise was given uu-
stintedly to action which has gone far toward
restoring confidence ard which resulted in inn
mense practical assistance to distressed but
solvent borrowers
NEARLY 100000 OF CERTIFICATES ISSUED
TIM total amount of Clearinp Housa nort;aoo.~.