The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1904-05-20


per cent. money market.
The total exports OF gold this move
ment are still nearly SlS,ooooo0 less thar the
imports. Although Japan lis borrowing
S250O0.000 in New York, much OF which Is
expected to so abroad To maintain her bal
ance in the Bank of England, gold con-
tinues TO arrive ar San Francisco from
Japan and TO be transferred across the con-
tinent by wire TO New York. The treasury
reports imports OF gold from Japan for the
nine months ending with March, 1904. Vs.
324. 600. practically all OF which came dur
ing the four months beginning with Deeem-
Der. 1903. The subtTeasury at New York has
paid out during April and May 10 date on
Geographic order Sl4, $4,000 against the DE-
post at the San Francisco mint OF i'm
ported Japanese yen. This makes the total
receipts of gold from Japan on this move
ment SS,224,5cO. equal 10 more than hatt or
the gold exports. Conceding the truth OF
the statement that the Japanese gold was
sent here to settle accounts In Europe, aud
adding the Panama payment OF SoVo0o:
exports of $6S.elO00o.
The slight effect upon the markets for
money and securities of the present gold
movement is significant in comparison with
the panic caused by smaller gold exports
IN 1898. the legislation of the past ten Years
has destroyed the endless chain, made the
gold standard effective and provided for
meeting temporary deficiencies in revenue
by the issue of treasury notes for one
year. Moreover the freedom with which the
United States treasury furnishes gold Tor
export whenever wanted. although con-
traTy TO the practice OF other governments,
has its compensaticns in that foreign bank
ers are ever ready to supply US with gold
when we need IL, and are willing 10 pay
for Ii. having confidence that they Will be
paid in kind when the obligations are due
The advance in the rates for call money
and for time money is not quite one-h&lf or
l per cent. since the gold exports began
and practically all of the advance has been
made in the last week.
There is reason to believe that the loan
item in the next bank statement may show
considerable reduction. The last state
ment indicated the speedy exhaustion Of the
surplus under the continued gold exports.
and this would have necessitated reduc-
ton in loans in order TO prevent a deficit.
Every emergency in finance provides its
| own remedy in accordance with natural
| law. For months money has been drug
on the market, the rate on call having
| fallen once low y per cent Thine
money was difficult 10 place at rates as
| low as per cent. for sixty days. and
per cent. for six months With the disap-
pearance through exports of over $50 900 900
| in gold, rates for money have advanced,
| so that now six months loans are quoted at
from 324 TO per cent.
! Foreign bankers, who have hitherto been
/ able TO obtain good rates for money at
/ home as here, have now re-entered the loan
4 llldThtl, anu IL II pFODdDlt lDdl lNtlI Oltf-
| ings will constitute a very important factor
| in that market for the next three months
| or longer. They are taking advantage OF
| the steady inquiry for remittance TO offer
| ninety-day bills drawn on London and
| Paris, and are loaning the proceeds. so
| far as possible. for six months. This in
| wolves one renewal on. the part of the
| drawers of the bills. which they expect
| can be renewed at from 21z to Pa per cent,
the first discount to be made in London
at per cent. or a little below, and i'm Paris
/ at pa per cent, while the loans may be
carried here at from 31z TO per cent. When
| these bills finally become due, after one
| renewal, these drawers expect to be able TO
| maturing in November, when cotton bills
will be. as usual very plentiful In this mar
| ket Such operations in exchange are Gus
| tomary in the early summer, and are often
the intent of the drawers of the bills is to
cover them with cotton bills a rate which
| will afford profit in addition 10 that de-
! rived from the difference between the In
which they have 20 pay for discounting the
bills. 1t Is through loans from this source
| that the loan item in the bank statement
! is usually reduced during the summer.
Authorities in exchange express the opin-
| ion that these short sales. as they might
| be called, although providing a means Of
! remittance TO a great many people. Will
have no appreciable effect upon the present
| gold movement, because that is based upon
j specific requirements of so much gold to
| be paid IN Paris. and is, therefore. to a
| certain extent, not controlled by the condi-
| lions of the exchange market. II is ar in
| teresting fact however. that more long
| bills on Paris have been sold than ster-
| ling bills, the reason being that exchange
| on Paris Is now at the gold export point.
| There is almost certainty that the bills
| can be covered at maturity for much less
| than the present rate for sight frances
| Wall-Street Journal.