The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1903-02-01
stage. There is no Official confirmation Of
the theory. but the wind is blowing that


xxx
The New York banks are In much
stronger position than year ago. The
same is true OF the trust companies. Banks
have increased their capital stock, surplus
and undivided profits about $50 OO0. 900. Their
loans and deposits are about the same as
they were twelve months ago. The trust
companies are s14.oOo.ooo stronger in cash
than they were at the beginning OF 1902,
and their loans are less by $35.0 600. One
weak feature OF the New York bank situa
ton has always been their policy of doing
too much business with their depositors'
money and too little with their own re-
sources. They are making a very. health
ful change In this regard and are getting
putting more of their own capital into their
business. The Standard Oil party leads in
this and the Morgan party is next in line,
both having Immensely strengthened their
actual standing in the amount of cash in
vested. The trust companies are needing
the warning given them and are leaning
more and more to conservatism In the con-
duct OF their affairs. They are increasing
the reserves in their own vaults and grad
ually reducing the amount of their deposits
In banks. This is a splendid symptom and
is return to sounder principles, both of
banking and trusteeship. AS matters were
going (until a halt was called trust COM
panies deposited practically all their avail
able cash assets in banks, which were
counted in bank reserves, although in fact
they were a double liability and source
of danger to banks instead of strength.
This abuse is being corrected slowly but
surely, and should genuine emergency
appear the banks will be in a better posi-
ton than ever before to meet it success
fully.
Calamity criers are never quite happy
unless they are miserable. The latest thing
to contribute to their distress is the re-
mote possibility of a disturbance in the in
ternational money market incident to the
payment of 100000 for the Panama ca
nal and $4,000. 900 to the Colombian govern
ment in connection with the same enter
prise. There is slight likelihood of this
transaction making any disturbance what
ever in monetary affairs. The deal cam
not be consummated at the best for many
months to come, and when it is the ar
rangement will no doubt be conducted
through the large international banking
houses, as all such matters have been at
tended to in the past. AS a further in
surance to peacefuness I'm this regard it
will be well to remember that there is con-
tnually running in favor of the United
States a trade balance of at least $50, 600 900
a month, a figure which is likely to get
larger before it diminishes. The payment
OF $40, 10000, or four times S40.000OO0, for
the development OF our national resources
or the glory of the country will not en-
barrass domestic finances to any extent,
and should tend to stimulation instead of
depression.
Broad monetary conditions are becoming
easier, and there is going to be a demand
for every dollar of surplus which may be
available for business purposes, and this
surplus will naturally command good terms.
For that reason conservative people who do
not care to be annoyed by constant renewal
or readjustment Of short time loans are
willing to pay higher rates for long-tim
m N
arisen on that account between call money
and time money. Call money loans can be
made at per cent. or thereabouts, while
| strong corporations and individuals of I'M
| questioned credit are willing to pay Az and
5 per cent. for money for six months or a
| year. They do not care to take any
and will not be interrupted IL their
projects. They are therefore naturally
willing to pay. premium TO secure ease
of mind and the certainty of having cash
on hand whenever they may want it with
in fixed period. At the same time 1t is
not improbable that call money will con-
| tinue at the low rates throughout the
greater part of 1903. 1t must be remembered
| that the spirit of progress is rampant and
there are thousands of deals and enter
prises which require money to develop. Thi:
| development does not eat up destroy
cash or credits, but is in the direction OF
| expansion of business. They are invest.
ments which will yield income, but for the
! time being they tie. up money. The circu
! lation of the United States is larger thar
/ at any time in its history, exceeding $50 pei
| capita. Reinforced by confidence it i:
/ ample to supply, all needs now in sight
| Subtract confidence from the situation ant
| $500 circulation per capita would be INSULT
| cient. The outlook Is exceedingly bright
| Present conditions are, of course, not per
| feet, but they are on the whole eminently
satisfactory. So far as can be ascertainet
there is no fundamentally weak spot IL
view. Industries thriving, railroad.
| are making record earnings, production ha:
mot ynf nnnC mt on fha do hos
not yet fbagnn 70 noone be oLword an o
| there are none wise enough to say wher
it will. There are prophets Of evil, bu
their chorus is no more convincing nov
| than it has been at any time during the ST,
years of unrivaled and unbroken prosper
! ity. w. G.. N.