The sun. [volume] (New York [N.Y.]) 1833-1916, 1903-03-15
FINANCIAL CENTRE TsABRE.
DECLINE IN british CONSOLS
POINTS OUT THAT FACT.



Special Code Despatch TO TEE SUN.
LONDON, March 1.-THE decline In con-
soils this week TO the lowest point for gen
GRAFTON, which was due admittedly to Ameri-
can influences, has again drawn attention
to New York as the almost dominating factor
in the worlds financial situation. II IL
still customary to regard British funds as
the most reliable barometer OF both the
financial and political conditions OF the
world at large. Their value In this respect
however, Ia unquestionably diminishing
although perhaps only temporarily.
One cause Of the present low price is the
reduction in the rate OF interest, which was
decried few years ago when the price was
at the top notch and money was cheaper
than ever known before. There Ia also
some political uneasiness due to fear OF
Rupture Of international peace In connection
with the Balkan crisis or the possible out
come OF Hollands domestic troubles, COM
bined with Germany's covetousness tow
ard the Dutch kingdom.
The immediate, cause. however. OF the
extreme decline Of British national credit
il undoubtedly the sale in America OF
large portion OF the Sioo. mo 900 Of consols
ing in an already stringent European money
market. II Ia not considered probable In
London, Paris or Berlin that there will be
any substantial relief Of this stringenoy
in the near future. II 10 recognized that
American conditions will largely controi
the general monetary situation Tor tho
next few weeks. and in the absence OF neces-
sary legislation by the United states u
IL not understood how the abnormal and
unnecessary scarcity Of money can DO
remedied.
This difficulty arouses a renewal oil very
severe criticisms which are current IN
many quarters here. Of Congress- and us
impotence in any matter OF real REFORM
Thus the Sfatia urges that II Ia desirable
that President Roosevelt should call Con-
cress in special session and request II TO
take mes sures for the permanent relief
of the money market. II this IL done the
Stotist expects that the President Will
At least recommend that power I've given
TO the Secretary OF the Treasury TO lodge
the proceeds Of customs as we'll az internal
revenue with depository banks. OF course
on approved security
n this were done IL would add largely
TO the resources at the disposal Of the
market, and therefore diminish conndsq-
ably the danger in the autumn. Perhaps
II Congress were convened for tho ap0cal
purpose Of dealing with the banking ma
Treasury laws, II would take courage Md
pass a much moro SSaAprehensive nssAsufs'
In the first place, the banks are sow 70
oured TO keep In cash either Is or u per
cent OF the deposits. and must not touch
those rescrvos. no matter Whist may happen
to the trading community.
We says the Stoii~, suggest that this
should be modified to this sxtent, that tho
banks should lie allowed to use In lending
and disoounting part Of the reserves. pro-
vided they pay a duty Of say per cent.
10 the Government. Furthermore. the
hanks are now required to lodge In the
Treasury a. security for tbsir note cifciila-
lion bonds Of the United States. but these
bonds are 40 scarce and dear that this Ia
not profitable. especially a. the law : for
bids the banks to reduce their circulation
quickly. The banks should be allowed
to issue notes on the security Of gold.