New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1897-01-27
THE MONETARY SITUATION.

MOVEMENT TO REDUCE THE INTEREST on CoUN~
TRY BANK BALANCES IN THIS CITY.
A movement has been started among the New.
York banks lower the rate Of interest on balances
kept with them by out of town banks. Two per
cent has been allowed the balances for some time
but yesterday two leading banks. the Nations Park
and the Importers and Traders. sent notices to
their country correspondents that they would here
after pay only Il. per cent balances. The
New-York banks generally will doubtless fol-
low their example at A few Of the banks have
I'm the habit of cutting of interest entirely
balances above certain point, that when the
country banks had lot Of idle money on hand they
would not send it to New-York to draw interest.
The New-York banks thought the country banks
ought not TO have interest on more than their
normal balances. There is not much profit in the
country bank balances In the present state Of the
money market. The maximum rate for money
call is per cent. Time money rates are 2 per
cent for thirty and sixty days and per cent for
five and six months An informal agreement
entered into by the banks and trust companies six
weeks ago to let out no money call at less than
per cent. During the last two or three weeks
so much call money has been loaned at ~
per cent by insurance companies. foreign
houses and Stock Exchange houses that some Of
the parties to the per cent agreement. notably
trust companies. have withdrawn from IT, and are
lending money at IA per cent. All OF the
banks may have TO follow suit There Is abundant
reason for marking down the interest PAID 10 the
country banks.
The tendency toward lower rates Of interest II
well Illustrated by the course OF the Government
per cent bonds Of 1925. better known the
per cents. The quotation for these bonds yester-
day l23 The highest price ever touched by
them was i2is July Ia 1895. Since then the bonds
have been below lie. At 1913 the bonds return 81
per cent on the Investment There seems TO be ".
tie doubt that the per cents will sell higher. es-
peciay time money is bringing only 10 per
cent when the loans secured by Stock Exchange
cola teral There Is any number OF good railroad
per CENT bonds selling considerably above par. The
New Haven and Hartford Railroad payable In 1908.
are quoted at 1874 These are the highest priced I
per cent securities in the market They yield to the
investor a little less than per cent
in rates have led talk OF possible imports OF gold
Before gold can be brought from the other side
without loss there must be further fail In ex-
change OF at least cents. The growing ease
OF money In London. as well as at other European
financial centres Is evidence that the need Tor Lon
don TO add to the loars has secured In New-York
has passed or Is passing away. The security tor
to be no similar use for bills In the future. there
will be no need for drawing bankers bills. as the
supply Of commercial bids Is admittedly large enough
for the regular reauirementsof remitters ACCORDING
~ tie terdencv Of exchange rates toward a lower
level should be checked The Judgment OF experts
In exchange is that for time to come rates will
neither sink TO the gold import point nor mount to
the gold export point. but Keep oetween these Two
points Russia requires great deal more gold 20
Complete Its new currency system, but apparently
will have TO delay the acquisition Of 1t for the
present. The gold under. ;he existing state OF
The Bank OF England has adjusted discount rates so
ms to make n impractcable for Russia to call tor
gold now or until the bank the open market 10 In
a position to spare gold.