The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1902-09-21

Appearance of the Statement-Mar-
ket Closes Easy, With no Effective
Rally.
NEW YORK, Sept. 2O-The prob
| lem of the money market was thrown
| into an acute stage again today by the
| disclosure of the bank statement that
| the reserves of the clearing house
banks were $1,642,050 below the legal
requirements. This was in spite of
| contraction in the loan account of SILL
| 964,50O, the shrinkage in the cash hold
! ing having, reached 1881 700, as
| against preliminary estimates of less
| than four millions. An active selling
movement followed the appearance OF
| the statement which effectually wiped
| out the previous gains which had been
established under the leadership OF an
| aggressive advance of IA on large
| buying of st. Paul. There was no ap-.
| pearance of urgency in the selling and
! the losses established were not severe.
| The market closed distinctly easy and
with-no effective rally from the decline
| beyond the covering demand from
| room traders, who took quick profits
! on the decline.
The last time when a deficiency de-
| veloped in the reserves of the New
York banks was for the week ending
| Nov. 4, 1899. The reserves continued
| at deficit for several weeks, follow
| ing in spite of large loan contraction,
| the deficit reaching $2,788,650 on Nov.
| II, and disappearing on Nov. 25, as
result of the relief afforded by the Of
fer of the then Secretary Gage to pur-
| chase 5000, 900 per cents and OF
1907. This was the period Of the first
large f1oatation Of industrials, and the
over speculation which had occurred in
| them left the stock market vulnerable
| to the influence Of the tight money
| which persisted into December. Fur
| Their loan contraction is clearly indi-
| Gated by the present condition OF the.
| banks.
! Review of the Week.
| 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 towards the end of
the week as the rates for call loans at
! the stock exchange showed steadier
| tendency. But there was no revival of
| the animation which characterized the
| speculation up to the time it was in
! terrupted by the money squeeze and
only a few stocks showed any consid-
cradle activity, even after the relaxa-
| ton in the stringency of the money
market 1t is probable that the re-
straint of the speculation had much to
do with the quiet tone Of the money
market, although some relief was Of
fered from the process of depletion of
New York banking reserves. without,
| however, entirely arresting 1T. All pres
| sure of liquidation seemed to be
promptly relieved as soon as the calling
of loans ceased and prices of stocks
were easily lifted again, without in
| ducing any important renewal of the
selling. This was reflection of the
unvarying confidence which is felt IN
| the promise of active trade and pros
porous conditions during the coming
| season.
Corn and Cotton.
| Some effect was manifested early in
| the week from the freezing weather in
| the Northwest and the reports of dam
age to the corn crop, but the belief that
! the crop is practically made beyond the
reach of serious harm overcame this
| influence. The continued bad reports
| of the cotton crop were a more persist
! ent influence. RumOrS of a formal set
! Element of the anthracite miners strike
were followed by disappointment, but
| there was evidence of a considerable
| increase in the shipments Of coal to
market which induced a belief that the
/ trouble will wear itself out. Extraordi-
nary activity continues in the iron
| trade. the production and the making
| of contracts being limited only by sup
| pivot material, both domestic and I'M
ported, the domestic supply still suffer
| ing from shortage of fuel The iron and
steel stocks quite generally advanced,
and various other industrials reflected
/ the favorable conditions in their spe-
! cial trades.
The tight condition of the money
market and the danger therefrom of
future flurries was only apparent, due
| to the lack of advancing tendency of
1 stocks. The very activity of trade and
the large requirements thus created
was one of the factors that threatened
| the money market and especially the
/ convenience of those who are COM
/ mitted to speculation with borrowed
funds.
Situation Further Aggravated.
With unusually large crops to be
| moved, a condition of expanded 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
sustained export trade, the situation is
/ still further aggravated by the unex-
pectedly large customs collections and
able means for releasing the govern
! ment's surplus revenues to the mar
/ ket.
Since July 1 the government has col
| lected over $16,006,000 more for Gus
| toms than in the corresponding period
| last year, which is several millions
| more than the reduction In the inter-
nal revenue from the repeal of taxes
! on July l. 1t is only by reason Of an
| increase of over $16,000,000 in the gov
| eminent expenditures that the current
| surplus has been reduced about one
! third, but payments for customs duties
/ are made almost exclusively in New
| York and make a daily drain on New
| York bank reserves. Last year the
| United States treasury was purchas-
! ing bonds at this period at the rate of
| several millions a week. This week the
| offer to pay the Oct. 1 government in
terest has resulted in the disbursement
| of less than $4,000, 900 to the New York
/ money market.
Free government bonds held by ma
| tional banks have been used to the ex-
| tent of over 100000 as security for
| increase of government deposits with
banks, but practically none of this has
| gone into New York banks. The pay
| ments to the New York subtreasury on
account of customs and the deposits
| with that institution of currency for
/ telegraphic transfer to the interior
have largely exceeded the disburse-
| ment of government interest, so that
| bank reserves have not enjoyed any
4 actual recuperation from that source.
4 E,f