The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1899-11-10
Ne1y York Money Market.
SAID TO BE HAMPERED BY LAWS CON-
TRoLLLNG TIE LEGAL. RESERVES.

SAID TO BE HAMPERED BY LAWS CON
TROLLING THE LEGAL RESERVES.
The New York circular Of Henry Clews says:
Banking opinion very generally inclines TO
the conclusion that the fall return TO ease
will be much later this season than in ordinary
years From such symptoms in sight
bankers doing an Interior business are expect
ing little lending below per cent between
now and the first Of January. Unusual causes
nre at work IN the money market, the breadth
and force Of which it Is not easy to measure.
Something more than the movements incident
10. this crop season have TO be calculated upon.
Credit operations have been radically influenced
by the Industrial revolution incidental TO the
great trust creations Of the last ten months.
Since January / corporations with total of
less than 81 600 600 600 Of capital issues have
been organized. These transformations have
been attended with immense temporary dislo-
cations Of capital. The negotiations have In
voved large loans destined to run until the
new issues have been distributed and until
the underwriters have effected their lquida-
tons The national banks have doubtless par
ticipated 70 but a very small extent In these
operations; but many Of the trust companies,
private bankers and other financial institutions
have probably made advances to the extent
Of hundreds Of millions of dollars. with the
consequence that these credit resources are
largely withheld from uses to which they or
dinarily contribute at this season OF the year.
In addition to this special employment Of
credit the demand for the ordinary purposes
OF business has far surpassed all precedent.
The extraordinary development in. our manu-
features. our farming, our mining and our ex-
ports has placed an extraordinary pressure
upon the credit resources of the country.
There is limit TO the extent TO which this
sudden vast expansion of credit require
ments can be promptly responded to. 1t is
not merely that have power TO expand
our currency proportionately to these enlarged
wants Restriction falls equally upon the much
larger class Of credit operations that are car
ried on without the employment OF money
the ordinary loans and discounts Of the banks.
which are placed under sharp limitations by
TO lend Is regulated by the amount OF lawful
money they can control reserve against their
deposits, and yet the activity of the retail
trade and the increased requirements for pay
luent Of wages keeping the greenbacks
and gold in sctive circulation outside the
banks Had we an elastic bank currency sys-
tenn which would enable the banks to dis
tribute their notes under conditions like these
instead OF paying out their reserve money we
should have a twofold source OF relief which
resource Of retail circulation and in the next
place larger ability Of the banks to discount.
II thus appears that the prevailing stringency
IS due, more than anything else, to the legal
restrict ions upon banking operations and to
the artificial regulation OF currency sys-
Will be further developed under the present
conditions II is difficult to definitely indicate.
It seems only too possible that some interests
may suffer which. under freer conditions,
might safely and properly be accommodated
The nature and causes Of the stringency are
not suggestive Of early relief and make urgent
appeal to Congress for the earnest considera-
ton Of these credit and currency questions