New-York tribune., 1902-10-06
MONEY AND BUSINESS.

panic in the stock market was narrowly
sverted. Not because of any unsounan4ss IN
the industrial structure nor through any failure
OF the railways 20 make gocd returns Of earn
ings Notwithstanding a los5 % 162 2 per cent IN
earnings of the anthracite coal carving roads
the total for the entire country during nine
months Of 1902 was ( per cent greater than in
the corresponding period Of 1901 which In turn
far surpassed all earlier records Nevertheless
when the stock Exchange closed on Monday.
liquidation was in progress that threatened the
solvency Of many commission houses and
much larger number Of specuators Briefly
stated. credits were strained. and the magnitude
of financial operations was greater than could
safely be sustained. In a wise effort 10 strength
en- their reserves the banks began contracting
loans. and the pressure increased rnargined
securities were emptied on A market which was
in no condition 10 absorb the offerings An IN
eXpectedly bold step by the Secretary of the
Treasury relieved the situation Tuesday and
there was sudden recovery. but prices collapsed
with the circulation of a report regarding the
attitude Of the Controller Evidences Of ner-
vousness in the market were numerous. suggest
ing that securities are not in strong hands 10 the
extent generally believed.
Offers TO purchase bonds and anticipate inter.
est up 70 the end OF the fiscal year failed mate
n.
because the bonds were not held by the institu
tion that wanted the money. on Monday cau
loans 10 80 per cent. the highest point since
the Northern Pacific corner Of May g. 1901 ana
the situation was more critical than az any time
during the intervening seventeen months With
drawal OF cash by interior banks particularly
az grain and cotton centres. proved larger than
anticipated. while customs recelpts on nba
nomenally large imports produced continuous
absorption into the Sub-Treasury Appreciati,p
the extent 10 which the Treasury system was
responsible for the stringency, and fearing that
the crisis would not be limited 10 Wall Street
since there was no demand for cornnarciaI
paper. the Secretary Of the Treasury adoptad
two extremely radical measures The first Was
suggested in this column last week Deposits
OF public funds are entirely covered bv bonds
and II is obviously unnecessary 10 demand that
- per cent be held idle in the vaults OF the
banks. This ruling released about $40 OO0 OO0
throughout the country, and perhaps $1,000 O00
az this city Saturdays bank statement was
made up on the old basis however and shovvad
only a slight reserve.
Efforts by New-York bankers 10 secure
gold in Europe. together with large shipments
from London 10 Egypt and South America and
heavy expansion Of loans by the leading for
eign banks, finally started a movement for nro-
teetion OF reserves. and the discount rate OF the
BANK OF England was advanced 10 4 per cent
before this precaution was taken, however. the
proportion Of reserve 10 liability declined nearly
10 per cent Even after the weeks changes
the situation al London and Paris was strong
owing to the extensive preparations previously
made for emergencies. Yet the position is no
longer favorable for Withdrawals OF gold 10 New
forK' even II heavy borrowing on foreign ex-
eAaHse mao not already made imports praeti-
ely Hhpossiple On the other hand. foreign
conditions do not threaten movement OF yoId
from New-YoTk such as occurred last wear. al
though the shipping consolidation and numerous
foreign bond issues eomplicate the situation
foreisn exchange rates rose sharply when the
Bank OF England rate advanced. heavy arbitrage
sales OF stock giving further impetus but the
market was badly disarranged by an accident to