The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-09-21

The New York banks hold 81, 642.059 less
than the required reserve under the g per
cent. rule.
1.-THE most striking fact shown by the
official statement of the New York associ-
ated banks last week was that the surplus
reserve had been entirely wiped out. leaving
a deficiency of 1872. $50. 1t is noteworthy
that this is the first time since Nov. Is, 1893,
that a deficiency in reserve has been shown;
then ii was S.65s. 2o0. 1t may be observed
that the wiping out Of the surplus last
week should excite no apprehension. As
has heretofore been stated. reserves are for
use. not ornament, and whenever the needs
of the situation demand. an encroachment
on the surplus, even to the extent of its en-
tire extinction, is permissible and is so rec
ognized by the controller of the currency.
Moreover. it may be noted that only the
national banks in the association, number
ing AZ out of the 50, are required by law TO
maintain % per cent. of reserve to depos-
its. the remaining II state banks being
obliged legally to hold but Is per cent. The
BANKS in the association are exceptionally
strong as regards surplus and net profits,
which exceed by $14, 464, 400 the total capital
OF SlO0,0l2, 200, and therefore there cannot be
the least cause for anxiety. The banks will
in the current week and Immediately there
after receive considerable gold from Eu-
rope and from other sources, and hence the
present situation will be speedily relieved.
The banks last week recorded a loss of 81
2S1, 200 cash, specie being reduced by $685.
100 and legal tenders by i 1853. GOO. This loss
was much greater than that which was es-
timated on the basis of the traceable move
ments of money during the week, which
showed a probable decrease of S4,03S, 900. The
discrepancy can be accounted for on the
theory that there was a much greater
nxya ont 70 the N nrs than uynG
ed. The loans were contracted by $ll. 90, 800.
making a reduction since Aug. 16 of about
S41,5O0,OW. This contraction was doubt
less due to calls of loans by banks,
which thereby sought to rectify their po-
sition as regards reserve. The deposits fell
OF $19, S9S, 800, or S1 1000 NJ since Aug. 10.
The reserve requirements were reduced
s~4,S74,575 through the decrease in deposits.
Deducting this sum from the loss Of cash
leaves 81, ,125 as the loss of surplus re-
serve, which, as above stated, now stands
as a 81. ga, $50 deficiency. The circulation
was increased during the week s493. 500. max
ing S2,17S,6 600 since Aug. 9, which increase
was distributed among the larger banks.
The average daily clearings last week were
S25S, 000, 600, against S277, coo 1900 the previous
week, rejecting the smaller volume or
business on the Stock Exchange. The sec
rotary of the treasury may, If 1t seems to
him probable that relief can be permanent
ly afforded only through gold imports, be
induced to consider the suggestion which
was first made in the F1nancier of Sept Is,
anu WHICH HAS SllCt Dttn recommended ny
prominent bankers, that public funds be
placed in the national banks against the
premiums on the bonds now held against
deposits. The secretary has precedent for
this course, Secretary Fairchild. when he
was at the head of the department., having
accepted government bonds up to their
market value as security against deposits,
having no question as to his legal right to
do So"
Vice President A. b. Hepburn. of the
Chase National Bank, said of to-day's bank
statement:
There is nothing in the situation to
cause alarm. The West and South have
large amounts of money in New York
banks. Naturally they will withdraw much
of these funds, and will. borrow consider
able amounts to move grain and cotton.
For these perfectly legitimate reasons the
local banks are likely TO lose from $50, 000,0 900
to S75, 00o, 600 between this time and the mid
die of December. OF course, this money
will have to be supplied by liquidation Of
loans in this city. Money credits abroad
are toierably easy, and gold can be OBJ
tanned from the other side II desired.
amounts of foreign exchange, thereby
facilitating gold imports If necessary. Blu
money must rule high for the rest Of the
year"
President Dumont Clark, of the American
Exchange National Bank, and President
Simmons, of the Fourth National Bank,
both declared there was no occasion for
alarm. .