The sun., 1899-09-17
TIGHTCASH KNOCKSSTOCKS.
BANKS HAVE COT DOWN TO TIE
BOTTOM OF THEIR RESERVE.

Bsars Hammer the Market-Mstropolitan
Traction and Manhattan Lead In the
Tumbla-A Treasury sues sstion That Ma
tional Banks Put Dat More Circulation.
smash In stock market prices followed tho
publication yesterday OF the weekly statement of
averages OF the associated banks OF this city.
The statement showed that the surplus reserves
Of the banks had been nearly wiped out This
was construed at once az meaning that with cur
rency continuing TO leave this city In great vol
ume for crop-moying purposes in the interior,
there would have TO be o further contraction OF
loans by tho banks 70 maintain their cash re-
serves at the legal limit Of 25 per cent Of the depos-
its. II had been anticipated that the statement
would show decrease in deposits Of $50 900 900 OF
moro. this expectation being based the belief
that loans had been reduced in excess OF $40 000-
900. The statement actually reported . rsduc-
ton Of but S7,s54. 400 in loans.
The decrease in cash did not reach expectations,
being only IS 94T. 400. which was less than Fri
days estimates by q million or moro. Owing
TO the smnllness Of the reduction in loans. how
ever, the reduction in the deposits, which amount
cd to s11065, 700. was not enough 10 offset the
shrinkage in the reserves, 30 that tho surplus
reserves were cut down by 81, 1S3,475 leaving
tho surplus only S275.45O. This week some
relief TO the money situation is expected by rea-
son Of the payment In advance by tho Govern
mont Of the interest. amounting to S5, $50, Ba0,
duo on Government bonds on Oct /. About
s. 000. 900 Of tho total will be disbursed by the
Now York Sub Treasury. Payment OF coy-
pons begins tomorrow. and tho checks for the
interest on Registered bonds will be mailed about
tho middle Of the week.
So far, paying this interest in advance 10 the
only step taken by the Secretary Of the Treasury.
but IL is thought likely in banking circles that
with tho money situation SO acute the Secretary
will permit internal reysnue receipts 10 accumu-
late in tho special Government depository banks.
provided these banks deposit Government bonds
as security Action Of this sort. bank officers
say, would give important relief and add mil
lions Of dollars to the reserves within q short
time A few banks have. in view OF the situation.
enlarged their national bank circulation.
THE Sun can state that the Secretary Of the
Treasury recently called attention TO the fact
that the national banks Of this city have an aReyo
gate capital Of about $50 00O 0OO and that il
might be made much larger by funding surplus
into capital II the banks were disposed to do So
Mr. Gage pointed out that the New York citv
banks had outstanding in circulating notes about
Sl5, oO0 600 and that there was therefore room
for about SS5 900 600 increase in the note issues
by the national banks Of this city
An investment in Government bonds, even II
NOT piedgeu dSoecuIiy LOT Circulation, would nay
a steady interest to the investor Of from z 10 10
2 46 per cent in tho way Of returns on the capital
invested and II used for circulation al period
like tho present. small further profit could bo
gained. The Secretary said that Il would Seom
TO bO tho part OF wisdom for the New York banks
TO operate along these lines. II this plan was
entered upon in tho early part Of the year and
tho reserve power Of circulation held until tho
fall movement set in. $50. 900 900 or $40 600 900
Of money could be provided for county use, with
out touching dollar Of bank reserves As It is.
all the money that the banks are called upon 10
send 70 the West and South Is reserve money
legal tenders and specie II would not be noces-
sary for tho banks 70 buy the Government bonds
to be pledged as security against circulation, az
for a comparatively small compensation they
could borrow them.
The sevorest break in the stock market follow.
ing the publication Of the bank statement was in
the traction shares OF the borough Of Manhattan,
The stock Of the Metropolitan Street Railway Com
pAny fell down 14's points under heavy Hqui-
assing saies. assisted by Q bear atsack, while