The San Francisco call., 1898-05-05
THEE WAR AND MONEY.

ATTITUDE OF NEW YORK BANKS RE
 GARDING THE PROPOSED BOND ISSUE
 The New York circular of Henry Clews says
 Naturally under existing conditions, atten- ton is being attracted to the money market The presence here Of the Secretary of the Treasury has suggested the probable early in troduction of loan on the market Although there is no probability of any large amount or money being immediately needed by the GOV ernment vet the Secretary is evidently lrn- pressed with the desirableness of ample appro- priations being made early as possible. Be tween now and August is usually a period or ease in the loan market. Three to four months hence however, money will be wanted for the interior in large amounts, and important Treas ury negotiations coming concurrently with that movement might cause a conflict between the two currents of demand detrimental to each For that reason the banks are in accord with ing the negotiation of the new loans with the least possible delay. This is among the fac banks are putting themselves in a position Tor contracting for large amounts of the new bonds. This is having some influence upon the discount market time loans; but see no reason apprehend that such effects will be at all serious In their bearing on tne general business Of the country WIlhlH etle last ten weeks the loans and discounts or the local banks have been reduced SbI' VOu "hlca % shows how much the banks have already ooIe in anticipation of the special financial deInanus that have now arisen. It IS not to De con. con. cluded, however, that this contraction Of credit has fallen principal. upon commercial borrow CTS, for a matter of fact large portion or the liquidation has arisen rom the setuehent of various syndicate operations to which the banks had made very large advances. have reason to believe that the banks have entire confidence in the financial situation and are prepared to give all consideration to the wants of their customers.
 The absorption of money by the Government in the immediate future can only be through war loan, in some shape to be designated here after by Congress, and money can be made ticnt only temporarily in connection herewith, that Is to say during the period required for
  ernment Repositories. The Governments need of money will be such as to cause it to be paid out almost as fast received for sup plies for the army and navy and for the pay nent of salaries of officers and men. Besides, a good deal of the money already in the treasury will also be dsbursed, so that as out of circulation it will be increased. During the war Government securities are likely to be lnatrially increased, but railroad securities will not be. There will be time. however that a Government bond will go below the basis of 3I5 per cent interest in my opinion, even in inc event of a naval reverse which though possible, is not likely. The use Of money for business purposes will be curtailed more or less during the war enterprises will little time will be apt to settle down to a stere- otvped condition conducted conservative lines. The demand for money will diminish instead of increase for some time to come 1t ia only when people undertake big schemes not when peopie contract their operations internal. It will not stop railroads from ng n Soo nor of TS ao w bane to be eobed and fed. and that alone insures legitimate busi- ness dealings all over the country. Our cotton will be exported. and so will all other of our products that have foreign market in neutral ships assigned ger to neutral owners thereby securing the property from risk of seizure and confiscation by the enemy.
 Moneyed institutions will be unwise in contracting time loans; such a policy would tend to make money tight; and that might too easily be used argument in Congress that there is not money enough; in which case the tendency would be for Congress to legis- late for an increase in greenback issues in place of a bond issue. Should this be done 1t would be very serious matter.