New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1902-09-21
SURPLUS RESERVE GONE.
NO CAUSE FOR ALARM IN THE BANh
STATEMENT, HOWEVER, LEAD
ING BANKERS DECLARE

For the first time since November. 1899, the Clear
ing House weekly statement yesterday showed a
deficit of reserves which receded to per cent be-
low the % per cent proportion which the Associ-
ated Banks are required by the Clearing House
rules to maintain between net deposits and cash
holdings The reserve, however although, as a
whole only 24S per cent of the deposit liabilities is
not below the legal requirements. although the
national banks must, under the law maintain a =
per cent reserve. the reserve obligatory upon the
State banks is only 10 per cent. The surplus re-
serve a week ago had declined to about three-quar-
ters of q million dollars, and deficit yesterday
was not unexpected, although it had been thought
possible that in view of the extensive loan con-
traction during the week and the receipt of Treas
ury money from anticipated October interest pay
ment and the payment here of a considerable sum
against gold arriving at San Francisco. the surplus
reserve might be maintained. and even increased
little.
In the stock market an active selling movement
followed the appearance of the statement which
wiped out the previous gains which had been es-
tablshed under the leadership of an aggressive ad-
vance of 2s4 per cent on large buying OF ST. Paul
There appearance of urgency IN the sellllg
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 traders.
The detailed statement showed that thirty-six OF
the ffty-nine banks included in the report had
deficits of required The twenty-thIee banks
which not have a deficit were the Bank of New
York National Banking Association; the Bank OF
the Manhattan Company, the National City Bank,
the Chemical National Bank the Gallatin National
Bank the Greenwich Bank, the Leather Manu-
facturers' Bank the National Bank of Commerce,
the Chatham National Bank the Hanover Ma
tional Bank, the Market and Fulton National Bank.
the National Shoe and Leather Bank, the Oriental
Bank the East River National Bank, the Fourth
National Bank, the Second National Bank. the
First National Bank. the German American Bank,
the Chase National Bank, the Fifth Avenue Bank
the German Exchange Bank the Fifth National
Bank and the Western National Bank.
The decrease of 1883 800 in deposits compared
with decrease of only 81 1854 loans, believed
to represent large withdrawal by out of town in
stutions of their funds deposit here, this
being due to the desire of these Institutions be
in position to take advantage themselves of the
prevailing high for cali money.
number of bank officials, when in regard
to the shrlnkage of the agreed in saying
that there for alarm in the situation.
1t is generally considered that the % per pro-
portion of required reserve is more than actually
needed a margin of safety and deficits
small shown in yesterdays bank statement
regarded with alarm showing any dam
gerous condition of bank credit.
A. B. Hepburn, vice-president of the Chase Ma
tionaI Bank, said of the 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 considerable amounts grain and
cotton. For these perfectly legitimate reasons the
local banks are likely from s5o0OOOOo 49,,
600 900 between this time and the middle of Decem-
ber OF course this money will have be supplied
by liquidation of loans in this city Money credits
abroad are toleraby easy and gold can be obtained
crops will furnish large amounts of foreign
change. thereby facilitating gold imports if
sary. But money must rule high for the rest of
the year.
Dumont Clark president of the American EX-
change National Bank, said:
All talk of alarm is utter nonsense. 1t does not
matter If the reserves snow dehcit, so long as
that deficit is the result of honest conditions. Any
feeling resulting from to-days statement must
be altogether sentimental
President Simmons. of the Fourth National Bank.
said:
Facts speak for themselves. cannot go into de-
uneasiness"
AT the Sub-Treasury the opinion was expressed
that the figures of the bank statement indicated
that money was being boarded for the purpose of
inducing high interest rates on the decline The
last time when deficiency developed in the
serves OF the NewYork banks for the week
ment showed the aggregate reserve TO be 1888 $50
under the required reserve. 24.9 per cent of the
had decreased to GAG per cent. and in the week
ended November IS the proportion was just about
Is cent, although the reserve was $32025 under
the required figure. The November . statement
Showed surplus a result of the
lief afforded by the offer of Secretary Gage to
chase bonds This was the period of the first large
which had occurred in them left the stock market
vulnerable the influence of the tight money
1899 surplus of reserve had been continuously
maintained since September. 1885
The market for foreign exchange stffened sharply
yesterday, about the time of the publication of the
bank statement, sterling demand quotations being
81 s. 10 81 So This said to be the result of
brokers covering contracts due.