The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1899-12-04
FUTURE OF FUNDS
AS TO MONEY RATES
IS A CHECK UPON STOCK
TRADING
LARGE OPERATORS ARE Blu Is

Same Time Are Unwilling to In
crease Their Holdings Under Elk
listing Conditions Congress Not
Expected to Prove Disturbing.
NEW YORK, Dec. 3-(Special )-Henry
Clews' weekly stock letter says: The
stock market is still chiefly dominated
by monetary conditions, and until these
show a more favorable tendency the up
ward movement In securities is likely to
meet with considerable difficulty if car
ried out upon any considerable scale.
Apart from this factor the outlook is
especially favorable as has been repeat
edly explained in our previous advices.
The chief concern therefore is the course
of the money market until after Jan. /.
The advance in the Bank of England
rate, of course, means that no relief can
be expected in that quarter in the form
Of gold imports, especially while the
Transvaal war shows no sign Of an ap-
preaching end. Considerable hope has
been entertained that the return of cur
rency from the interior would bring the
supply of loanable funds in New York
nearer to normal conditions, but it is not
safe to place too much reliance on these
anticipations. Funds are now returning,
but less freely than expected, the great
activity of trade and industry every
where retarding the movement. Mean
while the treasury receipts continue to
exceed expenditures and had it not been
for Secretary Cages offer to buy bonds
some sharp manipulation of money rates
would have been possible. The secretary
has shown his wisdom in extending the
time for offers of bonds until Dec %,
that being the only available method of
offsetting the effects of cumbersome
treasury operations. Up to date the Of
fers have amounted to nearly ST. 900, 600.
The market shows a decided disposition
to run on specialties, and some excite
ment was manifested on reports of a
deal between Pennsylvania and Balti-
more & Ohio, which seem to have had no
other foundation than some working
understanding which will prevent losing
competition. Congress opens on Monday,
but is likely to be a much less disturbing
factor than usual; while President Nc
Kinley is expected to come out with
strong gold standard message
Although the bank resources are show
ing an assuring rate of recovery, and
there is no expectation of any return of
acute stringency there is yet an indispo-
sttion to venture upon large speculative
and initiating ease in money. The strin-
gency of the last three months has been
so severe and persistent and has caused
such sweeping liquidations in the stock
market that those influences have made
large operators unwilling to take any
thing for granted as to future ease in
Wall street loans. Spectators are pre-
ponderantly very bullish and in no
quarter do they find any reason for abat-
ing their attitude, and that feeling will
cause them to cling tOA their present hold
1ngS with great tenacity, but it is not
likely to induce them yet to materially
increase their holdings. Intelligent men
are wanting to comprehend more fully
the causes that lay at the bottom of the
late disturbances in the money market,
and the more they study the situation
the more they incline to the conclusion
that the chief adverse influences are i'm
planted in the laws regulating the nation
al banks. During the present year there
has been an extraordinary increase in
the currency and credit wants of the
people. To say nothing of the fact that
during the last five years of business de-
preston the population of the country
has increased some 100000, we have to
face the further facts:
l. That our productive population is
now more fully employed than ever be-
fore;
2. That the business of this class of
consumers is done almost entirely through
the use of money and not with checks
which calls for an increase in the circu-
Iatlng medium proportional to the in
crease in the volume of business:
3. That this increase in the current
money wants of the people is magnified
by a general advance in wages, averaging
not less than 10 per cent for the, current
year; and
4 That. within the same period, there
has been a general rise in prices of not
less than Is per cent on most Of the great
staples of trade
These recent changes In the business
situation imply an increase in the cir
culation wants of the country very much
larger than is generally imagined; and
yet there is nothing in the national bank
ing laws that provides scope for the ex-
pansion Of the bank currency; and hence
during the past twelve months of ur-
gent demand for money, the volume Of
the bank notes has remained stationary.
The pressure Of this retail demand for
currency must be satisfied at whatever
cost to other interests; and the conse-
quence is that the supply of lawful
money gold and legal tenders, out of
which the banking reserves are COM
pounded, IS mercilessly .1rawn upon. This
reduction of the reserves compels the
banks to reduce their loans and dis
counts; and in that way the credits which
are transacted through the use of checks
and without money are smaller and inev-
1tably contracted. 1t is exactly st this
point that the crushing stringency of
late months has arisen and it is the fact
that this position is created and enforced
by inf1exible law that clouds the pros
pect of the money market with an I'M
certainty more or less paralyzing.
Under situation like this there is
no way Of escape from a state of chronic
exposure to panic, except through sys-
TEN of bank note issues which will make
it to the interest of the banks to put out
their notes under the pressure Of the re-
tail demand for money. Under such con-
dftiOns, the retail wants could be sat-
isfied without trenching upon the claw
full money reserves; the reserves of the
metropolitan banks would be protected
against disturbing oscillations; the New
York banks would at all times be able
to care for the interests of their local
customers; and the money market would
be saved from the wild and artificial fuc
tuations in the state of credit and in the
rate OF interest which have become 2
fixed bane to the financial markets. Is
it possible that, while congress is about
to deal with some of the more theoretic
aspects of our money system. 1t will
neglect to remedy these not less serious
faults in the practical working of our
banking and currency arrangements?
am in favor of the passage of a bill
by congress which will determine the
| gold standard now and forever beyond
any eQuiVOcation, and also to provide
| that when greenbacks are redeemed in
gold they should thereafter only be ex-
changed for gold. 1t is not a good thing
to take them up altogether and cancel
| them, as they do not cost the eover,