The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1899-01-23
A FLOOD OF CREDIT
Seems About to Swamp Financial
Dealing in London

k, II.
don financial correspondent cables:
The change led you to anticipate has
come over our money market, and we
are now positively flooded with banking
credit, much so that we growl at
the Bank of England for not going at
once to the per cent. This is no won
der when balances are being lent in
the open market at three-quarters of
L per cent, and when money can be
borrowed for a week or a fortnight at L
per cent. Discount fell to rs per cent
Wednesday and was not much better
than per cent yesterday, although the
bill brokers made a struggle for 21b per
cent when they found the bank hanging
in the air at 315 per cent and export or
ders for gold reviving. If an irate dealer
is told the directors of the bank have
acted according to usage, the reply is
sure to be: Usage be hanged. With
money barely at 1 per cent. what is
the good of calling for 319 per cent?"
That is a rough and ready view which
takes no notice of the difficulties be-
setting the bank. 1t has drawn in no
gold worth mentioning by the per cent
rate. The total stock of coin and bull
lion is not 8S0O,O00 larger now than on
the 18th of October last, when the bank
rate was raised to 4 per cent, and is still
all told below $32, 100000. Nor have
foreign gold demands upon US ceased.
They seemed about to do so at the be-
ginning of the week,b ut no sooner did
the market send discounts down than
they revived again and 100000 left the
the rate was reduced. American and
German orders for gold also in the mar
ket were merely dormant, while higher
discount rates seemed probable. The
bank then might we'll hesitate Gold
exports or not, I think the rate will
have to come down to per cent, If not
lower.
1Jpaloft where 1t is the bank can ex-
ercise no control over the open market
and this year It is in a great part de-
prived of its usual leverage. The March
quarter is the one in which the heaviest
tax collections occur. These collections
are lodged in the bank by the treasury
which often has nine Or ten millions
more on credit there at the end of
March than at the beginning of jan
uary. Such pilings up strip the market
and give the bank control Of rates and
it may this year begin TO exercise this
control by the latter half of February.
Meanwhile the treasury is paying out
for armor plates, ships, Notifications,
ETC., faster than it receives, as is proved
by the fact that the government bal
ances this week are nearly ESQ, 900 less
than they were year ago. Here lies
the true cause of the extreme cheapness
of money. Both market and bank are
overwhelmed by the treasury diSburSe-
ments; while these continue unwhole-
some ease must prevail Speculation
an stocks is inevitably stimulated by
this ease and enormous business is now
doing in several departments of our
stock exchange.
ever, selling still predOminates, and
your railroad securities, bonds and
shares continue to be sent home on an
unexampled scale. At the same time a
beginning is being made in a counter
movement. Spectators are joining in
buying and the humble investor is also
putting in an occasional appearance,
timidly as yet, few bonds here, ten
shares there, but he is coming, and in
another month may be an eager and
indiscriminate buyer of the stocks he
scorned to look at when they were $50
or $50 cheaper.
Abroad, the markets are strong, too,
but there is still a distrust OF Paris. 1t
has been putting up Spanish bonds on
various pretexts, the conversion of the
debt one and otherwise making a brave
show; but the troubles of Spain are
drawing to a head all the same, and
those of the bourse with them. The
Spanish government is sitting the Bank
of Spain by its demands, and all the
bank can do is to emit more notes. Its
note circulation now is 95S, 400, 900, fully
eleven millions more than a year ago,
and the cry is for more paper. French
bankers must lend Spain at least &40,-
100000 to keep her going, and I do not
see how or where they can find the