Arizona republican. [volume] (Phoenix, Ariz.) 1890-1930, 1899-11-16
Low BANK RESERVES
indication of The COunfry'S
Present Prosperity.
The Elections Have Had Very LiifIe
Effect on BuSineSS-The Result
of the Next National Campaign
is Already RniiCipafGd.

check by money market conditions
Until these become more favorable any
extensive bull movement that may be
inaugurated is likely td meet with seri-
Gus resistance. As for the future of
the money market, funds are likely to
return from the interior more slowly
and in less amount than usual Indus
trial and commercial activity insure a
good demand for funds for some little
time to come. Meanwhile the treasury
continues to absorb money, adding to
general stringency. from which the
only relief in sight is its return from
the interior or the purchase of bonds
by the government. This latter device
has been resorted to before to counter
act the i'll effect of treasury operations.
and there is no doubt that Secretary
Gage will buy bonds when conditions
fully warrant doing 50. 1t is useless.
however, to expect the secretary. who
is an astute financiar, TO undertake any
method purely for the benefit of spec
ulative operations. In my opinion, a
fairly good interest rate for money just
now is beneficial, as it acts as barrier
against gold exports. The situation is
so unusually favorable in most re-
spects that excessive speculation might
easily be precipitated upon the coun-
try, which would mean a violent and
perhaps prostrating collapse later on.
Stiff rates for money are financial
brakes; and at a slower pace the mar
ket can more safely respond to bullish
influences. Money should soon begin
to return, resulting in rising bank aver
ages. No alarm need be felt should
the reserve temporarily fall below legal
requirements. The safety line is ample
enough to avert all danger; and the
law is so designed as TO give the banks
sufficient time to strengthen their re-
serves before the comptroller, who has
large discretion, can take action.
The elections had little effect. Their
results, however, were eminently salts
factory to those who believe sound
money and commercial expansion neces-
sary for the country's progress and
prosperity. OF course in the next ma
tional election Mr.. Mckinley and Mr.
Bryan will again be rival candidates.
That is the natural sequence of the
late elections; but no sane individual
has any misgivings about the outcome.
The administration has already been
well sustained; continued prosperity
Will strengthen its hold upon popular
imagination; and the discomfort upon
which Mr.. Bryans fallacies chiefly
thrived is now a thing of the past.
Facts and circumstances are against
any serious revival of Organism.
Bank clearings and railroad earnings
both emphatically remind US of the
phenomenal advances which the coun-
try is making. Activity prevails in al
most every trade and in every section
of the land. New enterprises are
springing up; some to supply new
wants; others to meet the. great de-
mand for manufactured goods. The
railroads are obliged to face increased
expense; but advances in rail rates and
heavy traffic promise continued large
net returns, and the ranks of dividend
payers are likely to be increased. Rail-
road securities still constitute one of
the safest forms of investment, and
some Of the low priced issues are likely
to score good advances during the next
six months. The industrials are often
making extraordinary profits; but
these cannot continue when increased
competition begins and trade demands
assume normal proportions.
An important difference between the
former administration and the pres
ent one is that the previous one had
such d depleted treasury, due to the
continuous bad times, that the govern
ment was compelled to be a constant
seller of bonds; while the present one,
due to good times prevailing, has an
excess of money in its vaults, the lock-
ing up of which is retarding the pros
porous business of the entire country.
To admit of this money getting out of
the treasury, the government would
certainly be justified in buying up some
of the very bonds that We're sold dur
ing the last administration, and, as the
money paid out therefor could be ad-
vantageously employed by the Ameri-
can enterprising people, it would doubt
less be a sagacious policy to adopt, be-
sides making the contrast a very
marked one between the financial con-
ditions of the two administrations.
The low reserves of the New York
banks is an evidence of the commercial
and Industrial activity of the country. /
AS it is well known, the associated !
banks of New York are below the .
per cent reserve required by law. This
very large reserve is only imperative .