The Worcester spy. [volume] (Worcester, Mass.) 1898-1904, 1899-11-05
A BAD STATEMENT,
Surplus Reserve Is
Totally Wiped Out
Of Being.
DUE TO LARGE lNCREASEOF TRADE
Large Fluctuations in
Leather Covering Many
Points.

The weekly statement of averages of
the New York clearing house banks un-
expectedly was unfavorable, and decid-
eddy so. Nobody seemed prepared for
a total extinguishment of the surplus
reserve, but that is just what happened
While deposits fell nearly six millions.
thereby reducing reserve liability by
twenty-five per cent of the decrease,
yet actual holdings of lawful money re-
serve-specie and legal tenders-were
reduced by nearly FIVE millions, hence
last weeks surplus of $303S,525 disap-
pears and a deficit of 1888, $50 takes its
place, the first time that the banks have
been under required reserve in many
months. Decrease in loans was slight
less than quarter million. The banks
+ still hold $50, 100000 more in deposits
Than the total Of outstanding loans, but
a year ago this excess was fifty per
cent larger. Loans are $17, 000, 900 great
er than a year ago, deposits are $1S.-
100000 less. The average of reserve sur
plus at the beginning of November in
the four years Immediately preceding
was SIS, 900.
1t is but fair to say that the statement
this week is made on rising averages,
and the banks undoubtedly are in bet
ter actual condition than the exhibit
indicates. The November interest and
dividend disbursements doubtless ac-
count in a considerable measure for the
showing, and already this money is be-
ginning to return to the banks. But
the most important element in the mon
etary situation as affecting New York
. bank reserves is the course of New
York exchange in Chicago, which has
advanced sharply to a premium of ten
cents clearly indicating that the return
movement Of funds has begun from the
west. The easier Money rates in New
York the last few days show that the
November disbursements also have be-
gun to return. OF course it is not pleas
ant to contemplate the banks of New
York under the laws requirements in
the matter Of reserve holdings but as
the condition results purely from the
-~great volume Of business expansion, the
demands of mercantile industry making
funds mucn in request, there is no rea-
son for fear.
Amateur students of political econ
+ omy may see n2ught but trouble ahead
when the demand for funds is so great
as to bring this condition about but
the facts are that the banks have en-
deavored fully to meet the legitimate
needs of expanding industry and their
condition simply results from the enor-
nous outburst Of trade this wear 1t
is not caused by any coddling of spec
ulation; the September and October IL
quotation in the stock market showed
clearly that the banks appreciate the
value of conservatism. Conditions
really are sound, but the fact is that
with the great western demands for
money this fall at a time of record
making industrial expansion, when for
~ &c .
porarily have interfered with our nat
r Ural recourse Of calling in part Of the
money owed US by Europe, the banks
have got down to a low point COM
paratively in reserve holdings.
We cannot transact business in
this country, all of 40 per cent larger
. in volume than a year ago without
wit, the loan market. On the whole,
the banks have handled this abnormal
situation ably and well. 1t is safe to
assume that this weeks bank averages
statement marks the end of the remark
able series of events in a remarkable
season, financially, monetarily and in
dustrially.
The stock market furnished some
marked specimens of how sentiment
changes in a hurry. From 49, United
States Leather ran down to Is and back
to IS. a truly remarkable record for a
brier space Of time, the whole episode
practically taking place in fifteen min
utes. The general market, of course,
weakened on the bank exhibit, declines
of lQ1h being common in the more
prominent sDecialties, but at the close
there was some rally, and the average
net decline for the day was but Y, and
for the week but A-not a bad record
by any means.
In Boston the market refused to de-
cline, at least in the home specialties,
and several Of them rose further. Do
minion Coal was up n more, at 49%,
rise Of 81 for the week United States
OIL was up IL, at 46A, closing at ASH,
21R net gain this week Santa Ysabel
touched S3s, rose to 9A, and closed at
8, Il rise for the day and loss of 9
for the week Butte was UP A. at So:
United States Mining u, at go; Parrot
IL, at 4s1s Copper Range ", at 1872,
and the whole list was broad and de-
cidedly firm.