The Topeka state journal., 1899-12-04
ENGLISH MONEY MARKET.
The Six Percent Bank Rate Will Be
Increased Be fore January l.

New York, Dec. 4-The Times Lon
don financial correspondent cables:
We have got our per cent bank
rates and the question is now what 1T IS
going to do for US? To some extent the
advance was a surprise, for no further
adverse movement in foreign eX-
changes had taken place and the mar
ket was to all appearances Sunerlng
merely from end OF the month stock
exchange settlement and bankers bal
lance sheet sQueezeS. At the same
time feverishness prevailed and the ac-
tiOn of the Bank of England itself
tended to aggravate the unrest One
day it refused to discount bills for bro
kers and the next offered to take them
up to so days at 6 per cent. The mar
ket took fright, and on Wednesday be-
came so terrified that it refused to buy
bills under 534 per cent, occasionally,
indeed asking 6 per cent.
When the bank rate went to per
cent on Thursday, the first feeling
therefore, was a sense of relief, and the
open market discount began to falI
away. VentureSOme credit handlers
talked of 5ss per cent. but prudent
houses demanded from SIS to 534 per
cent, lowering these quotations, how
ever. yesterday for bills for three
months and under. Money, too, was
easier yesterday at per cent. Early in
the week stock exchange settlement
rates were severe, at about per cent
on all good securities. including con-
soils, and that also helped to frighten
people.
With regard to cOnsols, money on
which has not been so dear for about
ten years, it seems that government
departments and the Bank of England
itself have been selling and as nobody
buys in these times. the market found
itself loaded with considerable amounts
of stock on which it had to arrange
loans into January, cOnSOl bargains be-
ing only settled once a month. To make
sure of advances into the new year
high rates were offered. because the
a+ "a aT1d nj TORPP00
pected to be greater than now.
The last time the bank rate was
per cent was nine years ago, when the
Barring crisis overlook the market, and
then it remained at that figure for just
a month Now there is no prospect of
such a swift return to comparative
ca Sc but rather one of higher rates still
by and by. In 1890. the Bank OF France
was able to lend the Bank of England
e3, ,O0O, 900 in gold. Now not only this
is impossible, but all the foreign mar
kets want metal as much as, If not
more than we do
But why this urgency with US for
more gold? The Bank of England pos
sesseS &10, ,5000 600 more metal now than
in November, 1890, and seems richer all
round; therefore, it may be said, there
is surely no cause for nervousness. I'm
fortunately, the position has changed
for the worse in other respects. Not on
ly are the banks liabilities 215.000,000
larger now than in 1890, but it is now
surrounded by a small group of other
Joint stock banks, each carrying l1abll-
tiles to the public of from &15O 900, 900
to almost &5O,0O0, 0OO These great
banks have mostly been formed by the
amaIgamation of a number of small
ones some of which are far from
strong. Their necessities in the shape
of cash, were anything to go wrong,
would, it is certain. be such that the
note and gold reserve of the Bank of
England might be swept away in a few
days.
It is imperative, therefore, that the
metallic reserve of the institution
round which all the credit of the en-
pire revoIves, should be far greater
than was formerly deemed sufficient.
vor of a strong reserve of gold the
present necessities arising from the
war, the hunger of all the markets for
more metal, the stOppage of the usual
supplies of gold. the artificia1ly stimu-
lated requirements of India and the in
crease in normal demands for bullion
for export due to the larger trade
transacted, and grounds enough for
vigilance are apparent It was reported
on Thursday that million in gold was
to be taken before the end of the week
for South America. This report was not
according to fact. for no gold has gone,
but the market says it was because last
weeks boat was slow. and that the bull
lion is sure to go next Friday. Suppose
this also to be false. none the less it is
true that heavy demands on our small
stock are sure to be experienced soon.