New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1902-09-28
finannai
The Financial World.

caused the market to act more wildly than n di5
yesterday Customarily, when bank state
ment is looked for with interest, some one vs+s
a line on it in advance of it's appearance ana
the movement of the market indicates what :;
coming. Yesterdays statement seemed IN h.
complete surprise; the more So that in advance
of its appearance there had been such persistp,+
selling of stocks as to quite severe d.
clnes from opening prices in most Of the lead
ing speculatives. This was held TO surely nrs-
sage a statement showing the large losse, h.,
the banks which had been figured out dailv g.,
the press through the week
Judge, then, Of the establishment when ~
ticker reeled off: Surplus reserve increa,d
$4,S7S,6I5." great shout went up on the noo-
of the Exchange. re-echoed In probably nina.
tenths of the commission houses on the straA,
Instantly the whole mob Of traders who had
been selling short. tumbled over each other IN
buy in their stocks; the brokers of the huu
posts bid them up with a rush; and between the
one and the other, the whole list was rushed IN
SO that in ten minutes less, all the preytou,
decline had been recovered and something more
added; quotations sometimes being q and
point apart OF course this feverish rise could
not last Brokers for pools which have been and
still are, trying to reduce their lines had as
sisted in the upward rush for the purpose Of
unloading: and they started in selling with all
their might Then came quick recession. The
market would not take the stocks thrown over
and the sellers had TO stop. This was most
notably the case with Missouri Pacific. The end
was that the market closed irregularly down;
after a morning as various and exciting as one
could wish.
The range of fuctuation was three to four
points in leading stocks, which is pretty good
work for a Saturday. After II was all over
everyone was discussing the extraordinary bank
statement. and the discussion will be continued
in the financial columns of every paper all over
the country this morning. Discussion Of bank
statements. however IS very sparingly INDUCED
in here A prominent banker once said that
prolonged study Of them would fit man for
lunatic asylum. Into their composition so maSy
and diverse elements enter-the latest and most
confusing being the action Of the numerous and
strong trust companies which have grown up
Of late years-that all calculations are wrong
certainly eight times out of ten. 1t is not worth
while spending much time trying to work out
guesses with such odds as that against the
guesser.
The statement as II appears shows that where
as the banks were last week a million or mere
below the % Fer cent reserve line, this week
they are Sc. 236, 900 above It, Also that they
have cut down their loans over 13 millions: and
have decreased in deposits over II millions We
also note that their total deposits foot up S76
and their total loans S74 millions This
is rather close TO the limit. deposits being the
loanable material of the banks.
When all this has been said we inquire what
are the rates at which money can be borrowed;
and find that time money commands anywhere
from S to II per cent for three TO four months
while loans for twelve months at per cent are
reported Call money takes its chances with the
days per cent. 20, 10. 10 OF 6. according to
the day and the hour. Probably the average for
the past week has been 10 per cent The relief
which the Treasury has given the money mar
ket counts sentimentaIly rather than in actual
amount; but at such a time as this. sentiment
S large factor in the situation. 1t is like the
gold sent by the Bank Of France to the Bank
IF England. in the Barring crisis. which imme-
1iately so far restored confidence that the boxes
had never TO be opened and were finally re-
turned just they came.
The feverish rally yesterday was an example
Of sentiment and therefore OF its Importance.
The actual economic situation at this time. is
that Wall Street has temporarily. but severely.
reduced its working capital The business
which the Street represents. which is that OF the
activity of the whole country. is in a
most prosperous state With the exception OF
the labor disturbance in the anthracite region.
everything is working at high pressure: the
great crops of the year inspiring universal con-
idence How is it, then. that the monetary
centre is depleted of working capital? The
ready. and unthinking answer. is-excessive
speculation Not There has been enough OF
this high speculation TO be a contributing cause
but the main cause is the high price Of nearly
every article of general consumption-grain'
meats, all other food products. either for man
DIT beast; fuel of every sort and kind and so on
through the list. The general result is. that II
takes a greater amount Of the medium OF eA-
change. money. to move or exchange these prod
nets than when their cost is lower. And az TINS
season, the process of exchange is the most
active of the year.
In normal times. there is always surplus o.
working capital at the monetary centres 10 1HA
rare of the speculation al those centres-
stocks at New-York in food products at Ch-
,ago There is now a great scarcity The scar
.ity is due mainly TO general causes just iH'
Toned, and in part 10 accidental CAUSES
Treasury INSCRIPTIONS The latter may De ni.
gated or removed. as the Secretary Is trs!As =
various ways to do with more or less sa0'
The other causes cannot be removed 4hey "'
Inherent in the situation. We must draw lnO-
rom abroad attracted by the high ntsfe'
ates here as compared with those at the ~
markets We are so drawing 1t. in our sou -,
,orts and otherwise. but we draw it Slowly
md at high rates. because our expantiAs
erprises. which in their early stages are IT,
ariIy speculative. have already resulted IL "a
arge borrowings there We are. theFe4oi,
ng borrowings on the tcp Of borrowings "t t,ns
made; and to get money under these ooiI-.
S costly Hence il is that foreign eN-- 80
ates still remain SO high. despite the E4Si
f interest here wall
The net result would seem to be that w.