The St. Louis Republic. [volume] (St. Louis, Mo.) 1888-1919, 1902-09-21
MONEY PROBLEM BECOMES
ACUTE IN WALL STREET.
HEAVY LOAN CONTRACTION
UNANAILING.
With Heavy Demand for Cash for
Regular Purposes Prospects
Are for High Rates.

New York Sept. e0-The problem OF the
money market was thrown into an acute
stage again to-day by the disclosure OF me
bank statement hat the reserves o. the
clearing house banks were N.6i2oS9 below
the legal requirements This was IN spite
OF a contraction in the loan account OF
Sl-sd.Jsi the shrtnkage in the cash mold
lngs having reached S-Ssi.ls. as sgainst
preliminary Of less than four mil
lions. An active selling movement followed
the appearance OF the statement winch e.
fectaaliy wiped cut the previous gains
which had been established Under the lead
ership Of an aggressive adTance OF "a on
large buying u ST. Paul There was no
appearance 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 pronts on tae decline The last
time when a deficiency Developed in the re-
serves % the New York banks was for the
week ending November 4. 1889.
LAST DEFICIENCY.
The reserves continued at q deficit for sew
eral weeks following in spite Of large loan
contraction. the dencit reaching s2-7ss.5@ on
November II and disappearing on November
-. as a result OF the relief afforded by the
offer Of the then Secretary Gage TO pUr-
chase 100000 ; Fer cents and Is of 1907.
This was the perio5 Of the first large tfo-
tstion OF fnduStrlatS, and the overspecula-
ton which had occurred in them left he
stock market vulnerable 10 the influence
OF the tight money which persisted into De-
cember. Further loan contraction IS clear
" indicated by the present condition OF the
banks
MONEY ALL-IMPORTANT.
The situation and outlook in the money
stocks throughout the week Losses have
not been severe at any time and the early
declines were largely recovered toward the
enc OF the week. as the rates FOR cali loans
al the Stock Exchange showed a steadied
~ten5enCy. But there was no revival OF the
animation which characterized the specu-
l1-lnn IN 10 the rfma 81 was iDrarrrnra1
by the money squeeze and only a few stocks
showed any considerable activity. even az
ter the relaxation in the stringency of the
money market II Is probable that the IT,
straint Of the speculation had much to do
with the quiet tone OF the money market.
although some relief was afforded from
the process of depletion of New York bank
ing reserves. without. however. entirely ar
resting IT. All pressure OF liquidation
seemed 10 be promtiy relieved as soon as
the ealing Of loans ceased and prices OF
stocks were easily lifted AGAIN. without in
selling.
FIRM CONFIDENCE.
This was a reflection OF the unvarying con-
hdence which is felt in the promise OF &C
i've trade and prosperous conditions during
Tested early In the week from the freezing
weather in the Northwest and the reports
OF damage 10 the corn crop. hut the belief
that the crop is practically made and he
yond the reach OF serious harm overcame
this influence The continuing had reports
VI AAN| NbAltl NIOF ere a LlOTr persistent
influence. Rumors CT a formal settlement
of the anthracite miners strike were fol-
lowed by disappointment. but there was ev-
idence Of a considerable increase in the
shipments Of coal TO market. which Induced
a belief that the trouble will wear itself
out. Extraordinary activity continues in
the iron trade. the production and the max
ing OF contracts being limited only by The
supply OF material, both domestic and i'm
from shortage OF fuel. The ron and steei
STOCKS quite generally advanced and vari-
Gus other industriels reflected the favora-
Die conditions in their special trades The
tight condition OF the money market and
The danger. therefore. OF future hurries. was
the only apparent drawback to the advan-
cling tendency Of stocks. The very activity
OF trade and the large requirements thu
created We're two OF the factors that threat
convenience Of those who are Committed 10
speculation with borrowed funds.
CROPS TO BE MOVED.
with unusually large crops to be moved.
a eo.'uill0i o. expanded credits the country
complicated by the heavy decrease in ex-
ports cue 10 last years crop Shortage and
large foreign borrowings made in anrcipa-
ton OF a sustained export trade. the situa-
ton Is still further aggravated by the un-
large customs collectors and
me apprcximsie exhaustion OF the available
means Tor releasing the Governments sur
Plus revenues to the market. Since July l
The Government has collected over 100000
more fCr customs than n the corresDondinx
last year. which il several millions
more than the reduction in the internal
revenue OF the repeal taxes en- July I It
slsoS9eo In the Government expenditures
mat The current surplus has been reduced
about nne-third. but payments for customs
duties are made almost exclusively in New
York. and make a daily drain on New York
hank reserves. Last year the United States
treasury was purchasing bonds at this pc
ilcd al the rate Of several millions a week.
This week the offer to paw the Octobe-
Government interest has resulted in the dis
bursement OF less than g OnN 600 IN the Sevy
York money marke..
BONDS FOR DEPOSIT.
Free Government bonds held by national
bank nave been used TO the extent of over
10000 as security for increase Of Cow
-rnment deposits with hanks. but prac-IcaIiy
meme Of this has gone into New York hanks
Inc payments to the New York SuDtreax-
nry on account OF customs and the deposits
with that institution of currency for teIe- |
graphic transfer TO the interior have large
" exceeded the disbursements OF Govern !
not enjoyed any actual recuperation from
source. The feasibility az ad1sriorai
OF relief by the Treasury Depart
rnent have been actively discussed during |
the week in Wall street. but none has bse5
which meets the approval OF the Sec
retaIy OF the TrsSsury: The % per cent
.xchanSe rate down 10 a point which made |
the engagement OF gold for .m-
port TO the extent OF 5000 in London or |
In transit TO that point. Shfpnerts from
made this week or before bring |
the total gold bound for this point to about
AOOo.oO. due to arrive in the next three |
weeks The future condition Of the local |
money market. Il Is believed. will turr
the additional amounts of foreign
gold which can be secured on profitable |
for shipne1 TO Nex York. Bankers
agree. however. that with the additional !,
interior requirements for currency stir 10
be met there Is a probability of tight
money in New York for several weeks TO
come.
Bonds have been dun and irregular. in
with stccks. United States =
4. rev ~ y. the Is = the :
and the ola - IL per cent. as compared i
with the closing call CT last week.