The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-12-26
0VERSUPPLY OF MONEY
GOTHAM BANKS HOLD $1,000, O7O IN
EXCESS OF RESERVE RULE.
Largest Deposits Reported Since Oc-
tOber and Minimum Rates for
Loans Expected.
The New York weekly bank statement


loans increase '.....'..'''''.''''''' 20
Specie, increase Observation-Disclosures. 4,640,6OO
Legal tenders. increase ............... 13.C00
deposits, increase .................... SUy, ~
Circulation, decrease ................. 105,40
The banks now hold 49, .070 in excess
of the requirements of the % per cent. rule.
The New York Financier says: 1.-The
statement of the clearinghouse banks of
New. York for the week ending Dec. "a
shows for the first time in some weeks the
banks have not been able to make use of the
surplus funds which are flowing to this city
The result is that excess reserves are in
creased by over two millions and now stand
at nineteen and one-half millions, the high
est figure reported since the last of October
In the period mentioned, however, the loans
of the banks have expanded forty-five mil
lions and deposits almost ffty-three mil
lions. Facts like these do not seem to indi-
cate anything approaching frmness in
money rates. The increase in loans for the
past week was So, 657, 800, which is smaller
than had been anticipated. detailed anal
ysis seems to show that special operations
by one or two large banks interfered with
the logical features of the weeks operations.
AS results prove the net receipts OF
cash, almost exclusively in the form
of specie, were $4,655,6OO. 1t is known
that gold is being received in large
amounts from San Francisco as a
result Of Australian imports and the
regular interior remittances were in favor of
New York, as were also operations with the
subtreasury The cash gain, therefore, is
easily explained, but since use is not being
found for the money the tendency is toward
idle accumulations and minimum rate for
funds. After the first of the year there
may be change in this condition, but it is
difficult to see how it can be more than tenn
porary. The immense volume of trade re-
ported by the country at large certainly i'm
plies demand for money, but despite this
fact and the equally important revelations
afforded by the operations with Europe,
which have resulted in heavy loans of
American balances to nearly every impor-
tant continental center, the plethora of
money is clearly established. The treasury
has called for the payment of the eight
millions of Pacific Railway funds in banks
but this will be returned in instalments, and
Will not equal the disbursements which the
redemption of the currency SKIES will neces-
state next month. If there were no bal
ance due the United States from Europe the
situation might be regarded with caution,
owing to the enormous expansion which has
taken place, but, as it is, there seems to be
nothing that could create serious complca-
tons in the money market"
HENRY CLEWS'S LETTER.
Henry Clews, in his weekly financial let
ter from New York. says: 1.-THE stock mar
ket displayed more than expected strength
throughout the week Professionals made
several attempts to force a reaction, but
failed, and those who had sold expecting to
repurchase in a lower market We're disap-
pointed. The reasons for the present
strength of the market are plain. They are
based on the great changes in the financial
industrial and mercantile branches which
have developed during the last few years.
Confidence in the future is universal. These
conditions, which are already familiar, were
first recognized by the large holders of Sc
curitieS and Shrewd buyers. Finally the
great outside public has become impressed
with these same beliefs, and is buying with
more or less determination. Speculation is
consequently increasing and al a rapid rate
but the danger point Is not yet in sight.
New buyers, as rule, have ample margins,
and their success has not been sufficient to
intoxicate them although caution is neces-
sary. An unusual amount of stocks and
bonds have been paid for outright so that
the floating supply is steadily diminishing,
while no new capital creations of impor-
lance have thus far been reported; the in
dustrials which have been fioated not being
strictly classed as new enterprises.
AS for the future of the market it is
exceptionally promising, and it's course can
not be calculated by ordinary precedents.
Everybody desires a reaction either to test
values or to buy back stocks which they
to be gratihed so far as the general mar
ket is concerned though it is quite likely
that overtrading will soon produce weak
spots. Confidence in the general market is
based upon two important factors-increas-
ing railroad prosperity and easy money. In
creased earnings inevitably exercise an i'm
portant effect on the value of securities
whose dividends and interest have hitherto
been a matter of doubt When nondividend
paying stocks stocks join the ranks of dividend
while high-class and per cent. securities
have risen to about a per cent basis, be-
cause OF cheap money. There is no pros
rates for some time to come. Any Strn-
gency here would quickly draw large sums
from abroad in settlement of EuropeS in
debtedneSS. Rates are not only low in New
York, but at Chicago and all interior CEN
tiers, indicating universal abundance seek
ing employment. The d1ft1culty in finding
satisfactory opportunities for capital is one
OF the problems of the day. AS railroad
construction offers but limited field. the
chief outlet appears to be in industrial de-
velopment and an expansion of our foreign
trade, particularly in the export of manu-
featured articles American capital must
seek new ventures abroad, and keep pace
with our most opportune political expan-
sion. In this connection the attempt of for
e1gn nations to place loans here is especi-
ally significant Russias success however
in her negotiations is somewhat problemat-
ical, as our people have had little experience
on so large scale as proposed in foreign
government loans but the fact that Russia
has come to this market is proof neVerthe-
less of the position we now occupy in the
estimation of the world. New York is pre-
eminently the emporium city of the western
hemisphere, and always will be to the
United States what London is to Great
Britain and Paris to France. London and
New York are now the worlds two greatest
financial centers and security markets. 1t
will not be long, l venture the prediction,
before the bonds and stocks of many foreign
nations, including government issues, will
be actively dealt in at the New York Stock
Exchange, thereby making it a recognized
worlds market
THE United States national banks hold
ing Pacific Railroad bonds, known as cur
rency skies, which become due Jan. l. 1899,
and on which their circulation and govern
ment deposits are based should at once
the amount maturing ($l2, S13, $500, of which
the banks hold largely, will cause a heavy
demand for United States government
bonds, and, with prices now strongly adj
action is imperative. The present condition
of affairs has very encouraging features.
This country is the worlds creditor, and
the large balances to be paid in must be
invested here, giving strong support to the
bond market. Universal confidence in in
creasing prosperity is drawing vast sums
from idle deposits into active and profita BILE
channels of trade which will give better
employment for the banks funds The ex-
pansion OF the country will call for enor-
quickening the exchanges and broadening
the possibilities of the banks, and, Judging
from the right settlement of every financial
question thus far, the coming subject of
currency reform and the future of the
banking system will receive wise and lib
eral legislation. The United States bonds
now in the market are: Continued seconds
at S9d991a, at option of government; tours
of 1907 at 111l2 yield $3.50 interest as eight
and half years investment: tours of 1925 at
n int civ