The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1899-07-17
PINCHED FOR HONEY.
English Demand For Cash Is Hard
to Supply.


New York, July 1.-THE Times Lon
don financial correspondent cables:
This has been a week of furry in the
money market. All anticipations of
ease have been completely falsified and
discount houses have been badly
caught. Instead of the market esca ping
from the grasp Of the Bank of England
it continues 50 dependent that the bank
for the last few days has done nearly
all the fine discount business, other
credit establishments being half para
lyZed by fright. No appreciable calm
ing effect has yet been produced by the
advance in the rate Of 31z per cent for
the Bank of England is not only dis
counting at that figure, but still lend
ing small amounts at AZ per cent.
A variety of causes have been at
work. Political fears engendered by the
Transvaal dispute induce caution, but
that though it has been blamed, is not
the true source of the existing pressure
for such fears usually tend to make
money easy If people are not inclined
to use credit, credit cannot become
dear unless holders lock it up, which
they have not yet begun to do. Credit
is really more in demand and more en-
plOyed than ever because internal trade
is so active.
It is otherwise with domestic business,
thanks to the enormous outlay OF the
government in Warltke preparations, eS-
pecially irOnclads. All the dock yards
are excessively busy and all armOr plate
works, all blast furnaces and all engine
y.
an unprecedented demand for currency
with which to pay wages and for bank
ing credit in every branch of business.
Nothing proves this better than the fact
that sOVereignS are still being dispatch
ed to Scotland instead of coming to the
bank. More than the amount of the new
gold bought by the Bank of England is
passing into circulation in this and other
directions The consequence is that the
London credit market is unusually
pinched for means at the moment when
the demand upon it is much in excess of
previous experience.
Then, also, we begin to suffer from
the effect of the reckless extravaganza
of the past few years and several minor
and one important credit institution this
week have been whispered against for
no discovered reason. Our commitments
in support of the German bankers are
still enormous and will Chicago please
note that Germany is no nearer quiet
times than before. Each stock exchange
settlement that comes round further
more reveals greater depths of involve
ment in unplaced loans, new company
capital issues and general financial and
Spare-r1gging commitments. The sight
of this condition of affairs induces the
more Observant bankers to exercise eau
ton and quietly accumulate a little cash
against contingencies, thereby increas-
ing the strain upon the Bank of Eng
land supply
At all points therefore. the market is
being pulled upon and it would not be
surprising TO see the Dank rate. per
cent next week. The discount houses
are quoting 35s to 3s4 per cent. There
would be nothing deadly in that were
our market alone rather hard up but it
might be productive of cOnsidera BILE
mischief from the mere fact that all
markets are alike incapable of rendering
each other assistance. It is strange that
in spite of the enormous production of
metal the scramble between the mar
kets for it should threaten to become
so intense in the coming autumn as to
upset the coach somewhere.
No failures have been announced but
there need be no surprise should some
occur. Several small discount firms
competed last month for bills to arrive
in July, until they drove the rate below
. per cent, and one house at least con
tracted to buy Indian bank bills arriv-
ing all through July at rs. Heavy loss
IS inevitable from this sort of trading.
Then. also more than one bad squat
has already happened on the continent
by which our market has been hit.