The sun., 1902-10-06
THE FINANCIAL SITUATION.

'
ago for the relief Of tho money market
averted what the wises' men in tho financial
community declare would hav" been the
greatest panic that Wall street had ever
seen. All sorts Of foolish stories were CIR
Cula'ed a. 10 what S"creiary Shaw SAID
and what was said :" him NJ the conference
with III" bankers that terminated IN ms
decision To tax" extreme measures ohe
tale, that IN" Secr"tarEs unlocking OF the
Treasury hoard was IN consequence OF n
promis" on IN" part "i influential men 10
do their best toward ending IN" coal S'rlNe'
was tvpicaIly absurd, Another story mat
IN" N""rntarv tod the banks 'ha' VIZ"
Treasury bank examiners had dis'"NeT'h
that ther" were several N'"cK fNchanS'
n"H-'S IN ms 'i'y h"rr""lhs on eau l'un'
~" banks between sEo'""'"" ana s""'''"
apiece ana tha' th'S'' h'lR' 'oH,iS 'h"s' W.
reduced mas 'hls hasis ol ruin haiU'N'
'ha' 'h"r" ""r" certain wan n''"'I COM
MISSION houses 'd''l'H'n WIN W" "eS''l "
phmRlng element wh" were known '" W.
hofr"w"rS oi money IN sums apPr"N'na'
tho amounts named ana 'hai W" DAMS
ON their own notion noln"d th' pools ana
e'nncates VINO "rr" r"sp"hH'p'' Tor hioe'
~ this borrowing that IN" borrowing inns'
rot only stop, hut that ia existing volume
must b" curtailed. There has been much
talk "A 20 the legal basis OF Secretary Shaw
ruling. but the general consensus Is thar
II is host TO waive all these questions IN
view oi tho eNg"ncle- that were Pr"S'h''u'
lhat the secretary boId steps VIII q" NOR"
than anythlng else 10 h'tract puhhc a't'h-
ilon to our preson' inadequa'e' unsoien'inc
and, ~ times, dangerous currency system
and '" give an impulse '" n proper recon
~'ru"'lon ~ m" banking laws ~ 'no h"f'
session o' congress Is also generally ao-
mtt'"d.
u must h" said, however. tha' af'er all
the S''r"tarv dld NOT DO as mn'h ms n"
seemed 10 do. The popular impressions
gained from ms actl"h were Ilk" nose pro-
'N"llhg from fh" statement -Pr'ad hr'dd-
cast over me country IN 'nidsutll'h"r 'ha'
IN" Secretary was "ahou' 10 ISSUE sioo'o"""
~ 70" circulate 'on IN order '" NOV" 'he
cron' n" reasons ar" very c''ar why
m" hawks ma smail prom ny present III YAK
ing ont cir'ula'lon' ana h'h'r why 'h'y VIII
be loath 20 s'nrrV around TOT STATE ana
lnunl'lpal hohHs 70 subs'tu'e ior 'he WOW
ornment q ihat ,h"y nav" on deposit aHalhS'
circulation already ISSUED. 50 as '" 'hah'
them I" tak" OUT a''n'onal oirc"ia'i"n
against 'h' Government - "heh r'"eP"s-
i'"d' Assuming 'ha' III 'he c"ur'' W '"o OF
ihr'" months IN" circulating fn"hllrn oI 'ho
country VIII u" lncr"as"i 10" nlI'onS "'
dollars IN TINS way ana II VIII hardiv n'
I I
h"ip 'he present money market men
IN" money market wants h"lp wants "
At once, usually IN one place ana IN ample
quantity IN" scheme rs outlined docs
| not answer 'h"s" sp"cihcatlonS. Neih'r
is IN" PERMISSION aocorG"h 70 'h" hahks
20 Keep u" reserve aGa'nHt '"N"rniheh'
money on deNos!' WIN mem All thht "
has been cracked up 10 h". Secretary
shaw could not have said, as n" ls reported
10 hav" sad, thal ms acton Would release
$4,000 COO "f credits throughout the coun-
'rv and s0,Oo0.ooo q credits IN the cry Of
New York, and views generally about the
matter in financial circles have been loosely
| held Some cause for tho misapprohension
has boon in the natural confusion over the
| bank reserve fund, It seeming plausible
! that If $4,000 coo was added 10 the reserve
as stated the roscrve consisting Of ono
quarter of the bank deposi's-'hat the
actual loaninR power Of the banks would
he increased 10y four times this amount;
that is to say. 10y 100000 600 But the truth
Is simply that as the banks here have about
so 900 ,o0O Of Government money on de-
post. and have previously kept ont
$4,000 nm of u as r"serv" frnd, this
sl0Oc0,00o, being no longer necessary
a. reserve, car now be loaned if needed.
Similarly, one-quar;er Of all Government
money on deposit with the banks in all part
of tho country Will he thus released. A.
the operation brings no new money into
the banks, il is apparent that in 'hn case Of
4 hank actually cNnandlng It's loans in tho
wav indicated hv tho Secretary. tho Suan-
cal position of the institution will bo
weakened.
II was with full realization ~ this
fact undoubtedly, that The committee of
tho Clearing House decided, in substance
not 20 allow the banks in their charge ~
take ADVANTAGE of the SocretarvS N r.
The Clearing House Association saws SIM
ply. We are the governing BODY of y great
lanking machine comprising directly and
/ indirectly al the banks in this city MANY
of those banks are verv strong Others
are not so strong. For tho protection of
the financial community wo have always