St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1893-06-30
CAME TO THE RESCUE.
Action of the Banks Breaks
the High Rates for
Money.
Clearing House Certificates
Taken Out by Solid In
stitutions.
General Relief at Once AZ
forded the Street by
This Action.
Much New York Money Tied
Up in Philadelphia
Banks.

L
money, which mounted skyward this
morning, as much as Is per cent being
quoted in the forenoon, broke in an un-
expected manner about midday as the
result of the action of the clearing house
loan committee, which as had been pre-
viously pointed out, is the same as the
clearing house committee. This morn
ing the committee, or rather majority
of it, in conjunction with George f.
bank, virtually formed a syndicate
by agreeing to take out lot of clearing
house loan certificates for the purpose
of putting stop to the high rates for
money and the panic that virtually ex-
listed in the money market Some of
the banks, the Gallatin and the Fourth
National. for instance, had never taken
out loan certificates before, and they
had no need to do so now, except for
the moral effect to be produced thereby.
BY taking out certificates, though, it
enables them to lend large sums of
money without entrenching upon the
Cash in Their Vaults.
All of them have more than the re-
quired lawful reserve of 25 per cent Of
their deposits. As a result of the COM
mittee's deliberations this morning an
issue of $9.000,0OO of certificates was
authorized, and all the members of the
local committee availed themselves of
the opportunity in proportion to their
capital. except the Chemical and I'M
porters' and Traders National
banks. The amounts thus taken
were as follows: Gal!atin Ma,
tionaI bank, $500, 200; Fourth National
bank, 81, ,OOO, 600; Chase National bank,
81. .50O. 900: Corn Exchange bank, $780,
600; First National bank, $2,500,000;
total, S6,0O0,0O0. Immediately after the
issue of certificates was authorized III.
p. Frothingham, representing some OF
the banks, lent $3000.000 on the stock
exchange at & of l per cent and inter
est, and the rate Immediately fell to 6
per cent, afterWard increasing to II per
cent and then falling at o'clock to 3
per cent.
Mr.. Tappen, president of the Gallatin
bank, frankly admitted that his bank
had taken out half a million dollars of
loan certificates, but declined to state
the names of the
Other Banks That Had Done So.
In accordance with the rule of the
committee, however, he said that the
committee had today authorized the
issue of S9,000,000 of certificates, which
made about SIS, 600, 900 issued altogether
In explanation of today's action Mr..
Tappen said:
s'No money was to be obtained this
morning at any price, and the commit
tee thought it was time something
should be done. This bank took out
$500, 1000 of certificates, not because we
needed them, but to break up the high
rate for money. Other banks took out
large amount, but you must get the
names from them. We had 33 per cent
reserve this morning, so we did not need
certificates, but by taking them out we
were enabled to lend S500.000 without
encroaching upon our cash."
Mr.. Simmons. president of the Fourth
National bank, said: This bank did
not need the certificates or money, but
it seemed to me necessary that some
action should be taken to give relief to
the pressing, demands of the merchants
and to stop this unreasonable money
panic. This morning our cash on hand
and our call loans exceeded 66 per cent
of our deposits"
Have Plenty of Cash.
F. 81. Perkins Jr., president of the
Importers and Traders National bank,
said the report was not true that he had
refused to take out certificates for his
bank. 81 do not know" he added,
"whether we shall take any out or not.
No hax plantN of tn Ipn6 yxith
out doing So"
Mr.. Williams, president Of the Chem
ical bank, declined to say whether his
bank would or would not take out any
certificates. 1t is believed in banking
circles that both the Chemical and I'M
porters and Traders bank will take
out certificates this week. Some of the
largest banks did SO yesterday, but
simply to accommodate their customers
without entrenching upon the cash in
their vaults.
The stock market enjoyed boom in
prices as result of the clearing house
committees action and the relief was
general The condition of affairs in
Philadelphia banking circles in connec-
ton with their accounts with banks in
this city, to which attention was called
in these dispatches couple of days ago,
is becoming more marked. According
to adyices received from Philadelphia
this morning New York exchange in
that city is at
A Premium of So for $1,000,
or half cent on the dollar. Several
large banks in this city have large bal
ances owing to them by Philadelphia
banks, and which the latter are unable
to remit OH account of their inability to
procure New York exchange or cur
rency. One bank in this city has $780,
600 tied up i'll Philadelphia Ill that way;
another has 100000 and another $780,
600, and the question is becoming
serious one. Some of the
banks here have charged the sums thus
owing by their Philadelphia customers
for collections to the latter's reserve ac-
counts with them. This will make it
necessary, of course, for these Phila-
delphia banks to make their accounts
here good in some way If they
have to draw on the other
cities. But the banks have no t
done anything in the matter but to use
extreme caution in cashing Philadel-
phia exchange from their customers.
Unless the Philadelphia banks remit
this week. it is probable, according to
some New York bankers, that a dis
count will be charged Oh all Philadel-
phia exchange received from dealers
here. One case is known where large
discount was charged for check of
100000. it being a special transaction.
Enormous Bond transactions.
NEW YORK, June 29.-Dealers say
| that transaction in government honds