The Saint Paul globe., 1897-09-27
aANxs ARE GETTING OUT NEARLY
S5,OOO,OOO WEEK OF THEIR
RESERVE.
NEEDED IN MOVING CROPS
AND IN PAYMENT FOR STOCKS
WHICH WESTERN MERCHANTS
ARE PUTTING IN.
RASH SPECULATION CHECKED.
More Healthy Conditions Apparent
in All Trade in the
Street.
NEW YORK, Sept 26.-In his week

NEW YORK, Sept. 26.-In his week
" review of the financial SITUATION
Henry CIeWs says: ..o,+;on IN
oortain dangers connected with the specuia-
five conditions of xhe stock market eepesai,. ~
N the large expansion OF purchases anu ti,e tt.e
undue forcing up OF prices IS aPiI,as hass of mar
gins. The subsequent course OF opeIat;lons p;
has proved that our warning was noI uH n IN IN
lv and that it has not been neeoeu Ldl 70
lenders of money and notably certain jain
bicb Iend freely on stock exchange secull-
ties have had their eyes open anu lah~,i a
means for inducing conspicuous opei at, 49,
who were carrying threateningly large @ llnes
of stocks, to reduce their holuinss " ~
conservative limits. 49,
This intervention was wise and mas hao me e
effect of producing healthier olstriou'i1n 80 "
securities Apart from the fact OF a IaIse
outflow of money to the interior, WIN me
snnarent certainty of further large shlpments'
which suggested the possibility OF coming
stringency in the money market IL Mas
plainly out of the question for large lehueIs
fo advance without stint to a rev poiu oper-
etors who were carrying stocks to an over
loaded extent in effort to produce a SUD
den and unreasonable imitation In prices,
which they had no means OF SUSTAINING III
the event of adverse conditions appearing
The banks have been losing $5,000,OOo week
from their reserves in satisfying the wants
of the interior and, in view OF the large
the outflow may easily be continued at about
that rate for some weeks to come. The present
amount of the bank reserves, though liberal
as compared with the same date OIL former
wears is suggestive of conservatism in loans;
and, for that reason, it is equally suggestive
of caution on the part Of operators against
overlooking themselves with stocks
In years of prosperous harvests there is
always an active speculative buying OF stocks
SO soon as the harvest is assured. At the
same time there is also an unusual demand
upon the city banks for currency to move the
crops. point is thus reached In the early
fall at which there comes a conflict between
the money demand from the interior and the
demand for loans from the stock exchange
interest. The wants of the former class must
have the preference; and almost invariably
the latter class have to contract their loans
at the cost of a spasm in the stock market.
AS usual this rule is now being d1sregarded
by stock operators; and the experience OF the
past week has been reminder of the penalty
of the lack of circumspection. The period at
which Wall street may hope to reap the full
fruits of an abundant harvest is when
money begins to flow back from the interior,
which probably will not occur this year until
about the end of October.
The action of the banks has been timed
with prudence and consideration. Had 1t
come at a later stage the overlooking by san
guine operators would have reached worse
eXcesses, the contraction of loans would have
been more severe, and the stock exchange
would have been seized with a violent convul-
sion, with consequent heavy losses and more
or less shock to general business. Taken
in time however, this regulatory handling
has been administered when operators were
still able to accommodate themselves to 1T.
The large holders have been able to reduce
their holdings without creating any SpaSm or
distrust and within three or four days the
stock market has been readjusted upon more
conservative basis with disturbance of only
few points in prices So little has conf
dence been affected that towards the end of
the week. quotations have in large measure
recovered. AS the net result we have more
prudent and conservative position of specula-
tion. Margins have been strengthened, hold
ings have been better distributed, and oper-
ators have better understanding to what
dealers will expect in the way of margins.
All this may mean tanning of the excessive
enthusiasm which has carried the market of
its feet for the last three months, and it will
at least have a tendency to keep affairs in
safer shape until the return of currency from
the interior removes the possibility of mon
etary pressure In the meantime encourage
ment may be taken from the fact that the
radical disciplining of large holders has had
such slight disturbing effect upon the
market. 1t shows not only confidence among
responsible operators, but also that there is
no lack of disposition. or ability to take large
amounts of securities on reasonable basis
Of prices which means a preponderant con.
viction that values have not yet reached max
imum figures. 1t is to be hoped however
that this confidence may not relapse into The
late eXcesses If it does a severer twist of tht
money screw may be expected.
The regulatory action of the banks and the
advance IN the rate Of interest have had val
liable results outside the stock market AL
though London has sent home some consid
cradle amounts of stocks during the week
yet this item is a small offset against The
large balance of foreign trade in our favor
The rise In the local rate of interest has en-
abled US to procure gold from Europe Some
$2'9OO oGO due to New York banks has beer
ordered remitted in specie and 81 600 O0o i
expected in San Francisco from Australia,
total contribution for the week of sc. 500 600
AT the moment of writing the rates of ex
change afford no profit on the Importation n
gold, and the Bank of England has raised
lts rate TO 242 per cent; but our banks ar,
ANXIOUS 10 Iortlty their reserves against tn,
large shipments OF money to the interior am
they may be expected to put up the rate O
interest to a figure that will bring il from
abroad. - - va
Wall street seems to only partially recoeniz
tue TACT that our relations with Spain re
!aung 10 the Cuba question are now enter
ing upon new and important nhase RotI
at Washington and Madrid the utmost dinIo
Inauc secrecy is maintained as to Ministe
Woedtords representations to the Snanisl
government 1t seems certain that orr cas
was presented with a. marked courtesy ON,
I1enuiness OF temper, so as to avoid an,
needless oHense to Spanish pride. And II 4
% %popapie Shdt, IN pursuance of that tentativ
method Oh approach anything like immediat
urgency OF interposition has been avoided
but at the same ume there are strong roo
SUNS lot suppos1ng that our government vii
soon reach the conclusion that American no
uence cannot go beyond a certain limit n n
t Sount MF. Woodford is instructed to Civ
SPAN 10 understand this with a clearnos
that will compel her to speak with soma NC
cision as to her attitude in certain non+1, pi :