The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1902-12-26
POOL HAS EFFECT
Creation of $50, 900, 900. Loan
Helps Out Money Markets.
All Business Branches Continues Good
But Foreign Exports Not What
They Should Be.

New York, Dec. 22.-Henry ..Clews
has this to say of the money market
The creation of the $50, 600, 600 loan
pool by many of the big New York
hanks had a decidedly beneficial
effect. 1t was very practical demon
stratlon that powerful interests were
agreed in protecting the market
against an unnecessary crisis; that
good and legitimate borrowers would
secure such accommodation as they
might need, and that no funds would
be available for speculative purposes.
What the emergency was, serious
enough to call for such unusual ac-
tion. is not revealed. 1t was probably
general, and can no doubt be traced
back to the large amounts OF money
involved in various underwriting and
syndicate operations. For some time
mast it has been no secret
that this was the weakest spot in the
whole. situation; and some of our
ablest financiers have beer sorely puz-
zIed to know how the period OF stress
anticipated at this season of the year
could be met 1t is believed that
all serious danger has been averted,
and such, it is to be hoped, will prove
TO be the case. The mere assurance
that 500, 600, 900 will be available In
case of crisis tends to remove appre-
hension and prevent such an emer-
gency. 1t may be the money will not
be wanted for the same reason that
deposition will not withdraw his &C
count so long as he has confidence In
his bank. The influence, however, OF
this offer by strong bankers upon SEN
timent is highly important and bene-
fetal. Call money was easier at once,
though time money remains about six
per cent.
1t is worthy of note that in spite
of the heavy liquidation of the last
three months the contraction of loans
has been only $50, 600. OC0 since high.
water mark in the middle of August.
: This is comparatively small reduc
ton, and is probably explained BY
the fact that American loans abroad
have been freely Cancelled or shifted
to New York. Foreign bankers have
been somewhat distrustful of Ameri
can methods of financing, and thii
has thrown us more upon our own re
sources at somewhat inconvenien
season. AS result we ought to shil
less gold in 1908 for settlements; 81
this enforced retrenchmens has it
advantages.
While time money is on six Pc
cent basis and good stocks on AZ
per cent basis, it is evident no legi
innate widespread bull market can b.
expected, in spite of the 1920 point
decline lately experienced. Eithe
money rates or stocks must decline il
order to equaIize this difference; JUS
which remains to be seen. There i
much reason in tire argument tina
after such an uninterrupted decline a
that just noted good reaction is due
Considering the activity and sound
ness of general business, any improve
ment in the monetary situation woul'
certainly warrant fair recovery
The year closes with no sign of
cessation in that activity; on the con
trary, there is every evidence that, i
merchandise prices could be n ade t.
decline somewhat in proportion to tn
drop of stocks. new and safer bust
ness level would be reached on whicl
plenty of new contracts could b
placed with confidence. Present higl
prices are q serious obstruction t
new enterprise. The effect of higl
prices has been strikingly illustrates
in our foreign trade returns, whicl
showed loss of SIG 600. 600 in export
during the last eleven months and Al
increase of $40, 600. 600 in imports
Much of this loss can be traced to tn
deficit of last years corn crop and it
effect upon other cereals and meat
which form large part of our ex
ports; but higher prices for cotton AM
oils, also manufactured products gen
really, stimulate imports and checke'
exports until our excess of exports TO
the eleven months of this year wa
only 1897, 400, 600, compared witt
$527. 900. 900 same time last year ant
$571, 900, 900 the year before. So per
sistent and heavy decline in our in
ternational trade balance is highl.
significant There is probability o
q change for the better in this re
spect for there is good demand TO-
corn for export this year. and the re
cent declines in wheat and corn ar
favorable to an outward movement
of those staples.
The immediate outlook for the stool
market is for natural reaction afte
the recent very heavy decline II
prices Currency is beginning to re
turn from the interior more freely AMI
treasury INSCRIPTIONS are diminishing
while lower prices for wheat and corr
promise better supply of export bills
To this extent the situation seeml
slightly better. The Venezuelan stu
alton is less disturbing factor; fol
there seems to be no misunderstanding
between the United States and Euro
mean powers abont the ACQUISITION Of