Evening star. [volume] (Washington, D.C.) 1854-1972, 1897-09-03
HELD BY THE BANKS
Many Millions Over the Required
Legal Reserve.
GREAT ACCUMULATION OF WEALTH
Acting Controller Coffin on the
Financial Outlook.
EFFECT OF LOW INTEREST

The acting controller of the currency,
MIR. George NJ. Coffin. who keeps in con-
slant touch with the financial condition of
the country, through the official reports
made to him by the national banks, rs con-
fdent of a most prosperous financial sea-
son for the United States in the near fu-
ture.
There is every evidence that the United
States is accommodating vast amount of
capital of its own" said Mr.. Collin to a
Star reporter today, "and this gees to show
that sooner or later, if it is rot already so,
this country will be financially independent
of Great Britain, or any other natiCn.-
This financial independence was the war
cry of the free silverites. Through the
workings of natural causes, however, we
are now achieving what the free silver men
would have endeavored to accomplish by a
plan which would have resulted only in the
depreciation of our currency.
The current rate for demand loans in
New York today is 1 IA per cent, against
slightly higher rate in London. and ii is
not at all improbable that under these cir
cumstances New York bankers are loaning
money in London. Having trade balances
abroad, and with the interest rate higher
in England than here it is not 10 be sup
posed that they will lose the opportunity
for getting more for their money by letting
e.
In spite of the enormous loss and de-
probation in values sustained by the Unit
ed States during the past four years. the
latest bank statistics show that there has
been very large accumulation of capital
in this country. much of which Is lying idle
in bank. awaiting favorable opportunity
for Investment
The national banks of this country now
hold about S15O,O1.GD over and above the
sum required by law as legal reserve
This same condition of affairs undoubtedly
exists in the savings banks, the trust COM
panies and other banking institutions
through the states of the Union. There has
been wonderful accumulation of capital
In the savings banks. In 1874 they held de-
posts to the amount of 81. I41 ,WE, 900. In
1896 this sum had increased to the extent
oi nearly Slo.CUO.OOO. and there is no doubt
that the figures for 1897 will show a further
upward movement
'One result of this enormous accumula-
ton of capital will be lower rates of in
tcrest for the future. 1 am sure that this
VII come. and my opinion is shared by
many bankers throughout the country
90 not believe that We will see again as
hlSh rates of interest have prevailed in
recent years. While this outlook NAV not
be acceptable to the money lenders il will
De great boon to the manufacturers tine
merchants contractors and other borrow
erS of money.
1t VIII give to the American manufac-
tCreis the great advantage enjoyed by their
English and European competitors in the
~" iateS Vi iiittTeSI upon the money hOr-
roWed to conduct their business enterprises
ThlS low interest rate has been a very
potent factor in enabling those manufac-
turers to control the foreign markets for
their exports. and of which markets Amer
lean manufacturers should and will have
a coed share.
II American manufacturers could So
ere as low rates of interest as those paid
thelr British competitors a very large
part OF the $2DWO.UD0 worth of raw c.t-
ton annually exported to British mills
could be manufactured in the United
states. to the great benefit of American
iahor ard investors in mill enterprises.
More than this, the Americans WonlI
rave 2 better chance at the markets of
central and South America for their cot
Ton goods, markets that belong 70 them
naturally, but which are mainly absorbed
by the Germans and British now
With this prospect of easy and plentiful
money ahead of us. there is still an ele-
Eient OF danger in the situation 1t is the
az niger of rash investment and speculation
with money comparatively so easy to oh
tain, there Will be natural inclination to
rush into speculation of all kinds and th.
people may be sw ept off their feet in the
booms which would follow for a short
time
The gold discoveries may also affect the
Situe ton 1t has been demonstrated thai
the great panic of 1851 was largely due 20
the speculations arising from the gold dis
ccveries in California and Australia of the
preceding years. There is danger of his
tory repeating itself at this time, and
every new spaper that warns the peop:t.
against indulging in speculation and care
less investment will be comforting a public
benefaction."