The morning call., 1893-12-04
EFFECTS OF THE MONEY CRISIS
ON BUSINESS.

Tables prepared at the Treasury Depart
ment reflect the effects of the late tinan-
cial revulsio on the general trade of the
country. Up 10 and including the month
of June, 1893 the receipts from customs
duties showed an increase over the re-
ceipts for the corresponding months Of
1892; and up to and including the month
of May. 1S93 the receipts from internal
revenue also showed an increase. In May
and June. when the money pinch began to
be felt, the revenue from these sources be-
gan to fall off. The customs receipts for
July fell off S2.5O0.000. those for August
So 600. 600. those for September S4, 100000,
those for October S5.300.000. those for No
vember nearly S4.000,000. These are
round figures. simultaneously, the re-
ceipts from internal revenue fell off $780,
600 in June. 100000 in July. $500. 900 in
August, 50, SOC. 600 in September. 81 500 900
in October and small trife in November
In the same months the expenses of Gov
ernment which had not been adjusted to
meet any such contingency, showed an in
crease for the six months June November,
though small reduction was effected in
September and October.
The reduction in the customs revenue
was not wholly due to the effect Of the
financial crisis. Many merchants with
held orders for foreign goods in the expec-
taton OF lower rates of duties. The con-
dltion of the money market is wholly
ehargeable with the falling off in the re-
ceipts from internal revenue; and it is
nOti ceable that those receipts have quickly
responded to the improvement in CONNER
cial conditions in the last half of Novem-
ber. The increase in the public expendi-
lures in the last six months is explained
at Washington by pointing to the large
payments for pensions and for the new
vessels ordered for the navy. There is
no immediate prospect Of any reduction in
these expenditures. 1t thus becomes i'm
perative on Congress TO see that the new
revenue measures do not lead to serious
diminution of income.
The prospect that the public revenue
will increase with the Improvement of
business If its sources are not cut off is
clear. and the improvement is as dis
tlnctly foreshadowed as any future event
can be. All commercial business in this
country radia;es from New York, as all
business in Great Britain radiates from
London. When the center is in healthy
condition the circumference is enabled 20
turn its resources to account. Now, it is
a striking fact that never since the New
York banks were esta ablished were they as
strong as they are now. They are abso-
lutely overfiowiGg with money. For five
years the average reserve OF the New
York City banks at the end of November
has been 26.74 per cent of their liabilities.
1t is now 1890 per cent. They are almost
cfr
of San Francisco. They now hold the
enormous sum of S1S9, 663, 100 in money,
500, 900 of which is in specie. 1t is
hardly necessary to say that they have
placed themselves in this impregnable
position by sternly refusing to discount
for their customers. Their deposits
amount 10 S70,O0O.000 in excess of their
loans. Adding this to their capital of
$780, 900 they hold S130,000.OOO of idle
money in their vaults. Aud money in the
open market on time loans is only worth a
trifle over 3 per cent. II stands to reason
that when the banks do conclude to lend
once more every safe enterprise and every
sound merchant will get all the money
wanted.
There is no example of such an accumu-
lation of money in the New York banks
which was not followed by an outburst of
speculation. At the great financial GEN.
ters this speculation takes the shape of
purchases of stocks and real estate. Else
where it materalizes in the shape of
increased development of material re-
sources. new railroad building, increased
area of cultivated land. Our connection
here with the Eastern financial centers is
rather sympathetic than real As mat
ter of fact. our banks do not depend in
any measure on the New York banks;
but the electric sympathy which exists be-
tween one center and another is often as
effective as actual interdependence, and
when New York booms the boom is
always felt more or less directly in San
Francisco