New-York tribune., 1902-10-01
RrLIEF FoR rRE MoNEr mlRKET.

htLlff fUh lht MOAtf MAhhfA-
Were the speculative element in Wall Street
the only sufferer from tight money market
there would be no occasion for unprecedented
measures by the Secretary OF the Treasury.
Heavy liquidation az rapidly declining security
quotations would contract loans and automati
cally restore normal rates. Unfortunately legiti-
mate trade would 5e seriously disarranged dur
ing such radical readjustment The situation
al the close of business on Monday was ex-
tremely critical. and panic was feared unless
instant relief could be found. Call loans had
reached 81 per cent. time money was al an
equivalent Of about 10 per cent. including COM
missions. and there was practically no demand
for commercial paper.
This predicament was not due alone 10 the
speculative orgy that recently raised the aver
age OF railway securities to the highest point on
record. but was caused in part by a constant
demand from the interior where the largest
crops on record wee being harvested and
moved 20 market. and in no small measure the
steady absorption by the Treasury was a con-
tributing fastor. From large deficit az the
close Of July 10 a surplus Of about SsO00OOO
now means the withdrawal Of over Sl5,O0G.OOO
from public use in two months and explains the
phenomenal net available Treasury cash bal
ance OF more than S22l .OO0Oo0 and the new
high water mark for government gold holdings
al more than S590OO0OO0
Confronted by these extraordinary conditions.
IL was not surprising that the Secretary re-
sorted 10 heroic treatment. BY ruling that de
poSits Of public funds did not require the ad-
ditioaal safeguard Of a - per cent cash reserve
the propriety or which was suggested in The
Tribune's Money and Business" article on Mon
day morning-he made IL possible for the banks
largely 70 expand their credits and provided
immediate relief. This places government de-
pOsits on the same basis as money sent 20 this
centre by interior banks and loaned for their
account by local correspondents. The propo-
sitlon 10 accept other security than government
bonds may be equally safe so far as the Treas
ury is now concerned. since Secretary Shaw
viii undoubtedly exercise suitable discretion in
the matter. but as a precedent for less eonserva-
tive SUCCESSORS this act may be the source OF
uneasiness hereafter.
As a temporary palliative the efficacy Of these
measures cannot he questioned. From a call
loan rate Of 35 per cent on Monday there was
an instantaneous decline 20 per cent and
after declines Of from 10 10 points in security
prices there were recoveTies almost as great.
In this very rally of stocks. however. lies the
danger Of the S>rretarys remedy. II will be
three weeks. and perhaps full month, before
the pressure az the farms viii he relieved. and
an unequalled volume OF fall trade will call for
more money than ever before IL the Wall
Street contingent refuses To take warning. and
dr-ins this new blood 10 infuse vitality into the
stock market, an intention plainly discernible
yesterday. the nations Legitimate trade viii re-
ceive little benefit. for stringency VIII return
before the season OF heavy demands has ended
Far from heing an occasion for wild enthusi-
asm and imitation Of stocks on borrowed capital
the Secretary's remarkable action should lead
10 a clearer perception Of the dangers of the
situation and induce a more prudent spirit In
both loaning and speculative circles.