The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1899-09-19
SHORT OF MONEY
Commissioner Breidenthal Dis.
cusses Eastern Conditions.
Calls Attention to Condition Of
New York Banks.
CAUSE FOR ALARM.
Expects a Panic In the Money
Centers Soon.
Why the West Will Not Be
Affected

ct notice by the financial reports yes
terday that the New York money mar
ket is in a very peculiar condltlon,
said Bank Commissioner John W.
3reidenthal today Mr.. Breidenthal, IN
his position as bank commissioners, has
for years been q close daily observer OF
financial conditions all over the coun-
Try. and the least change is Immediately
noticed by him.
1.-THE banks of New York" Mr.. Breid-
enthal continued, have $780, 600 Of
deposfts. vet with all that money they
had only $4,000 on hand yesterday
over and above their reserve In otnef
words they had only $t5UOO aNaIIaple
for loaping purposes That means LI1s1L
New York is getting very snort LOr
'.T-his condition has been gradually
coming on and they have been Trying
TO head it off. Some time ago the gov
eminent came to their aid-the govern
ment always comes to the ald OF New
York-and paid off the interest on the
October coupons on the govern oVeILIn 4tslt
bonds, amounting to $5,OOO,OOO- But thal
is gone and the banks are almost down
to their reserve again.
When the banks of New York with
nine hundred million deposits have only
S75. 600 that they can loan, 1t means
that they are getting hard up for
money. If all of the banks together
have only that much it means that
low their reserve. The same cOndltlOn
of affairs happened in 1893, ana at thaG
time the banks of New York issued
clearing house certificates remember
a Kansas City bank issued a draft for
the balance due it from its New I OK
correspondent, and the New York BANK
sent out a clearing house ceruhcate-
The Kansas City bank sent 1t back
with the information that 1t cOuIdn
use clearing house certificates, out
wanted the cash. The New York bank
CITY bank asked that it ship out silver
at the expense of the Kansas City bank
but the New York banks refused 10 90
even that.
After that happened I issued an or
der to Kansas banks. stating that all
deposits in New York banks exceeding
2 per cent of the banks total deposits
would not be considered to the credit of
the bank and Immediately howl went
up against me, but I didn't want kan
saS banks 20 keep putting money IN
New York banks if they cOuldnt get
It out again.
six weeks later John Sherman made
a speech in the senate in which he de-
nounced the methods of the New York
banks. He said if a bank with a CAPT
tai of a hundred thousand dollars in his
home town of Mansfield should refuse
to pay check when it was presented.
the comptroller would place the bank
in the hands of a receiver, and the same
rule ought to apply to million dollar
banks in New York.
1.-The difference between then and
now is that now that the surplus money
is in the west. 1t is stated in New
York that the money is being used to
move the crops in the west, and that
the stringency will be over in a short
time and the money will come back to
them But this is not true. An article
IN the Boston Globe a short time ago
stated that the west generally borrowed
S3O.0O0,O00 from the east for the purpose
of moving the crops. This year the peO-
pie OF the west have money enough of
their own to move their crops and they
are not borrowing from east for that
purpose. Consequently when the crops
are moved they won't send any OF the
money back east, so the east won't get
relief in that way.
The cause of this scarcity of money
in the east is the great increase in bust
ness. AS business increases it requires
more money to transact it. The in
crease in business has been so great
that il has drained New York of its sur
plus money, and there has been no more
TO take its place When Kansas and
the west was pouring interest money
into New York the banks there always
had supply coming in as well as go
ing out, but Kansas, at least, has
stopped paying much of its interest to
New York, and the supply is cut off
1T looks as though New York might
have to borrow money of Kansas. We
have money enough Yesterday 1 re-
ceived statements from fOrty-One state
banks under my last call, and they
show surplus of a million and a quar-
ter over and above their reserve. Kan
sas City also has plenty of money.
viii get in more Of the same kind of
statements today.
The war prospect over in England is
creating an uncertainty over there
which is also felt in New fork, and it