The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1902-10-05
DOWN WENT THE
STOCK MARKET
Failure Of the Coal Conference
Had Bad Effect.
LOW PRICES AT THE CLOSE
THE BANK STATEMENT RE-
CURED EXPLANATION.

Anew YORK, Oct. 4--There was
~ much confusion and excitement
in the stock market again to-
day. which resulted in last prices at a
level from one to three points lower
than last night for most of the promi-
nent active stocks. The failure of the
coal conference at Washington to eff
feet settlement prevented the recov-
cry which would naturally have fol-
lowed from the refutation OF yester-
days false rumors that the comptroller
OF the currency bad overruled the de-
cision of Secretary Shaw 20 remit the
requirement upon the national banks
to maintain a rs per cent reserve
against government deposits. After
an effective recovery the market re-
ceived a second shock from the ap-
pearance OF the bank statement
without change in its form TO indicate
the reduction in reserve requirements
permitted by Secretary Shaw. That is
TO say, government deposits are still
included with the deposits and reserve
requirements estimated at % per cent
of the total with the result that a
decrease in the surplus is indicated OF
I,4l7,425, bringing down that item TO
81, $500
Bad Bank Statement.
The clearing house committee was
long in session before the bank state
ment was given out, and no statement
accompanied it to show what policy
dictated it. A foot note TO the bank
statement gives the amount of gov
eminent deposits with clearing house
banks. Whatever may be the motives
impelling the action Of the clearing
house, the operators In stocks jumped
TO the conclusion that for stock mar
ket purposes the position of the New
York banks is to be regarded as though
Secretary Shaw's ruling was not in
force. The fact remains that the sec
retary's permissive latitude upon the
banks is available in case of a deter
mination by the clearing house to
change its decision or to relax its rule
at its own discretion.
The marked strength OF foreign eX-
change as a result of the weeks easy
money market and the shutting OF Of
any hope of gold imports or even with
| some apprehension of possible demand
/ for gold exports probably Influenced
| the clearing house authorities. The
| Imperial bank of Germany followed
the example of the Bank of England
and advanced its discount rate 1 per
| cent today. The London Statist makes
| the point that political uneasiness in
| France is inducing the Withdrawals of
! savings banks deposits and aggravat
1 ing the pressure for money leading to
| Withdrawals of French credits placed
with foreigners.
The Weeks Operations.
The banking conditions had become
such at the opening of the week that
a considerable loan contraction was
| imperative and loans placed in the
stock market were called in such large
volume as TO run the call loan rate
up TO IS per cent and precipitate
4 crisis in the stock market. Monday
| evening the market closed in a state
| of decentralization and there was grave
/ fear that panie would ensue or Tues
day. But the next morning the an
/ nouncement had been made OF drastic
measures OF relief OF the money situa-
| ton offered by Secretary of the Treas
ury Shaw, and there was a convulsive
rebound in prices of stocks which rath-
err more than wiped out the semi-panic
decline of Monday. The nervousness
and excitement of the trading de-
creased from day 10 day until the
market settled down into dizziness
towards the end of the week. The
| level of prices had reached about that
Of last weeks closing and was higher
/ in some cases.
So much for the market effect OF the
steps taken by the secretary Of the
I e..
market was equally marked, but not
so prompt The extreme stringency OF
the market was relieved and stocks
put to the forced liquidation in the
stock market, but rates continued high
/ In all departments. The conviction
emerged that high money rates are
/ likely to be maintained for the re-
mainder of the year. It is felt that a
| prodigal replacement Of the relief fund
/ in stock exchange loans would endan-
ger the situation again. and the policy
of bankers and large financial powers
| has been enough TO discourage any
renewal of speculative activity for the
present.
Shaw's Efforts.
The steps taken by the secretary Of
| the treasury are too well known TO need
/
| effective was the remission Of the re-
| quirement upon national banks 10
maintain 25 per cent cash reserve
/ against government deposits in their
vaults. as those deposits are held 10 be
amply secured by the government bonds
| placed in the custody of the govern
7 menG
| AS the government deposits in the
/ banks are over $3.50. 900 900 il was esti-
mated that this would release $50, 0OO,-
| 900 or over in cash to the money mar
/ ket. of which over 100000 would be
/ In vaults of New York banks. II was
/ estimated from this that basis would
| be established for additional credits Of
! $3.50. 0OO. O00 but the present drain upon
/ the banks grows out of the expanded
needs Of the circulation which cannot
be met by credits. The crop moving
period brings a large increase In the
| need for money to pass from hand 10
hand in the payment of wages and for
small lots Of farm produce IN cash The
| withdrawal of cash on deposit with the
/ banks for these purposes necessitates
a contraction of loans in the proper
ton of So for every dollar withdrawn
he