The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1899-09-17
SURPLUS EXHAUSTED
STATEMENT OF THE NEW YORK
CLEARING HOUSE BANKS CAUS-
ES MUCH COMMENT
RESERVES ARE At LOW EBB

Nothing to Cause Alarm ia situation
at Present, bnt There VIII BE
Calls Upon borrowers TO Settle
ACCOMPLISHMENTS Still Hold More
Reserve Than Required by Law
interesting Figures Given.
NEW YORK, Sept16.-The statement of
clearing house banks issued today shows
a practical exhaustion of the surplus re-
serves, which stand at $27545o over legal
requirements. This circumstance Is gen.
orally attributed 10 excess payments INTO
the United States subtreasury during the
Dast two months of about $l0,0O00OO "A
comparison with 1898, when the Barring
panic occurred, shows that the banks re-
ported on July l a deficit OF Sl'2ol'Voo'
This was increased to $16,OOO,OOO py Aug
70 and the Associated banks issued clear
ing house certificates for about $Su,oVo'-
00O to tide over the crisis. During TINS
time for several weeks there was no
statement issued indicating the indlVldual
standing of the banks. On Sept. 20 d
surplus over legal requirements existed
of $2S. geo, 600 The record for excess 1e-
serves was reached on Feb. 8, 1894, When
s111. SOC. GOO was reported. The highest TINS
wear was $44, 900 on May q. the FL
nancer says:
..rrba clearing house banks of New YORK,
according to their report for the week
| endine Sent. 16, lost about $6Oeo,VoV
in cash as a result of the pre-
vious six days operations. more
! than half of this was absorbed by me
treasury, and the rest went into the III
| terror. The banks reported, sept. D. less
| than So, 0OU, 000 cash over legal require
ment, so that the decrease 1or lile ca
rent week was larger than the aVallapie
! fund from which to draw it. The result
! needless to say, was accomplished by d
| heavy contraction in loans, with re-
| sultant shrirkage in deposits. Despite lue
| loss therefore, the banks stlll hold szio'-
| 4EO more reserve than required by law.
! Practically they have reached the lihiI
! of their power to supply new money dA1
| further demands must be met by renewed
oDerations of the character nameo-ths'I
| is. borrowers will be called upon 10
| liauidate their Indebtedness. TINS lore
! shadows, naturally, a continued nara
money market, although rates do not
| seem to be able to hold above per ceilI
under circumstances that ordinarily "ouio
indicate a money famine
."Thn truth Of the matter is that the
situation is we'll understood and lhere -
| mo annrehension whatever. Ii money
works much higher in New YORK tle lu l.'7
s,1rpluses which are held elsewhere Will
he quickly forwarded to this center, with
2 CONSEQUENT lessening pressure.
''The trouble, from q banking stand
noint. IS the heavy drain which the treas
NV is making ION the banks The loss
| since the end of July has been UPWARD OF
! 81, 900, 0OO-a sum much greater tnan mas
| gone to the cintePiory5Q Once. tins f1falh Is
relieved. all trouble4ove the future VIII
be eliminated. At present, however IL
is a serious factor. One year ago. 1t may
| ha remarked the excess reserve of the
| Now York banks was only S. QUO, but
a few weeks later The total had risen 10
| over $40 600 GOO Gold imports assisted IN
| creating this increase. There is no i'm
mediate sign that last years method OF
recuperation IS to be repeated now.
TO PREVENT A PANIC.
Bankers Yesterday devised a scheme to
| prevent further panic in the speculative
! markets in Wall street After the close
| of business on the stock exchange. and
| after the issue of the weekly bank state
ment that showed the banks had no
money to lend without encroaching on
!
! between bankers in several Of the Dig
| downtown Institutions
| TIL issue of clearing house cert1hcales
was discussed, but it was decided that
such a move would be unwise The ma
jority of the bankers favored, rather, the
issue Of national bank notes, and 1t was
! discovered that several or the, wiser ones
had provided for the present emergency.
Orders for %cireula ton cwere. sent to
| Washington some time ago; and the notes
have been prepared. Many Of the banks
now have them in their vaults ready TO
issue at once.
1t is understood in Wall street that
Secretary Gage recommends such an in
| crease in national bank circulation, and
for that reason he must refuse to do more
to relieve the situation than order the
payment in advance of the interest due
on the government bonds on Oct. l. In
addition a issue of $50, 1000, 900 to $4,000 600
might easily be made by the New York
! Institutions, and it is said that several
millions Of dollars of new money will be
| issued this week. Bankers expect by this
means to TIDE over the demand for money
in the interior. where it is being used TO
i move crops to the market.