The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1902-09-22
BANK STATEMENT
SHOWS SHORTAGE
As Result Stock Market Meets
an Acute Problem
aOSStS WERE NOT SEVERE
situation In Money Market Has Doml-
mated Speculation In Stock for a
Week-lron Market Is Ex-
traordinarlly Active.

New York, September 2o-The stock
market was thrown into an acute stage
today by the disclosure of the bank state
nent that the reserve OF the clearing
house banks were s1.642,O50 below the
legal requirements. This was in spite of
the contraction OF the loan account of
se4,5Oo. the shrlnkage in the cash hold
ing having reached $780,, roo as against
preliminary estimates of less than $4,-
100000. An active selling movement fol-
lowed the appearance of the statement,
which effectually wiped out the previous
gains which had been established under
the leadership Of an aggressive advance
OF 20 on large buying OF ST, Paul.
There was no appearance of urgency
demands in the selling. and the losses es-
tablished were not severe. The market
closed distinctly easy, with no effective
srally from the decline beyond the cover
ing demand of the room traders. who
fo9k quick profits On the decline. The last
'i.me when difficulty developed in the
reserves OF the New York banks was
for the week ending November l. 1893.
The reserves continued at deficit for
several weeks, following in spite of large
A'dii COAti dCliOtl, Tic utHCll ISdCHAA6 RNt-
7SS $50 on November Ii and disappearing
on November % as a result of the relief
afforded by the offer of Secretary Gage
to purchase s25,OOO0oO per cent and Is
of 1907. This was the period of the first
large flotation of industrials, and the over
speculation which had occurred in them
LETT the stock vulnerable to the influence
of the tight money, which persisted into
December Further loan contraction is
clearly indicated by the present condi-
lions of the banks
The situation and outlook in the money
market have dominated the speculation
IN stocks throughout the week. Losses
have not been severe at any time and the
early declines were largely recovered to-
wards the end of the week as the rates
for call loans at the stock exchange
showed a steadier tendency. But there
was no revival of the animation which
characterized the speculation. Up to then
it was interrupted by the money squeezes
and only few stocks showed any con-
siderable activity, even after the relation
in the stringency of the money market
1t is probable that the restraint of the
speculation had much to do with the
quiet tone of the money market, although
some relief which was afforded from the
process of depletion of New York bank
ing reserves without, however, entirely
arresting it.
Extraordinary activity continues in the
iron market, the production and the
making of contracts being limited only
by the supply of material both honestly
and imported, the domestic supply fiih
suffering from shortage of fuel. The
iron and steel stocks quite generally adj
vanced and various other industrials re-
fieeted the favorable conditions in their
special trades. The tight condition of
the money market and the danger thereof
of future fiurries was the only apparent
drawback to the advancing of stocks.
With unusually large crops to be
moved, a condition of expended credits,
the country over and the foreign ex-
change situation complicated by the
heavy decrease in exports due to last
years crop shortage and large foreign
borrowings made in anticipation of a sus-
stained export trade the situation is
still further aggravated by the unexpect-
eddy large customs collections and the
approximate exhaustion of the available
means for releasing the government
surplus revenues to the market. Since
July 10 the government has collected
over six millions of dollars more for
customs than in the corresponding period
last year which is several millions more
than the reduction in the international
revenue of the repeal of taxes on July
l. 1t is only by reason of an increase
of over $1600000O In the government ex-
penditures with current surplus has been
for customs duties are made almost ex-
cusively in New York and made a daily
drain on New York bank reserves.
The offer to pay the October l govern
ment interest has resulted in the dis
bursement of less than two million dol
lars to the New York money market.
Free government bonds held by national
banks have been used to the extent of
over $6,000,000 as securities for increase
of government deposits with banks prac-
tically none of this has gone into New
York banks
The payments to the New York SUBJ
treasury on account of customs and de-
posits with that institution of currency
for Geographic transfer to the interior
have largely exhausted the disbursement
of government interest that bank re-
serves have not enjoyed any actual re-
cuperation from that source. The FEAST
bility of additional measures of relief
by the treasury department have been
actively discussed during the week in
Wall street, but none has been found
which meets the approval of the secre-
tary of the treasury. The per cent money
rate Monday sent the sterling ex-
change rate down a point, which made
possible the engagement of gold for i'm
port to the extent of s3,5O0,0O0 in London
or to transit to that point. Shipments
from Australia made this week or before
being the total gold bound for this point
to about sS.O0O,O0o due to arrive in the
next three weeks The future condition
of the local market. it is believed, will
turn upon the additional amounts of for
eign gold which can be secured on profit
able terms for shipments to New York
Bankers agree, however that with the
additional interior requirements for cur
rency still to be met there is a probability
of tight money in New York for several
weeks to come.