The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1904-04-19
THE MONETARY SITUATION.

About s15O,ooO,OOO of short term notes have
been put out by railroad and other corpo-
rations since last summer These notes
have been Issued to provide capital for
the railroads, which capital would ordi-
narily have been provided by bond issues.
The borrowing corporations have no diff
Guilty in selling these notes. which have
proved decidedly attractive to investing in
situations and individuals, partly. doubt.
on account of the high rate obtainable by
the lender, and partly because of the short
maturity There Is good deal of fashion
In these things. Investors like nOVelty
especially when that novelty comes in the
form of large interest and quick turnover
II ~ Is UNDERSTOOD tnat an active canvass has
peen made by the banking houses in the
past few days TO discover corpora ions in
need of funds and secure the business
There is great difference of opinion i'm the
financial community with respect to the
wisdom of these borrowings For one thing
they have had the effect Of absolutely kill
ing what might have been a pretty fair
bond market. At the present time il is prac-
tcally impossible 10 sell bonds i'm any GUAM
tity at a reasonable price. Considering the
low rates at which money can be borrowed
on Stock Exchange collateral on long time
1T Is clear that there is something abnormal
In this. The natural Inference is that mon
ey is easy because those who have il are
willing TO lend il for relatively short peri
DDS, but are not willing TO invest it, The
short term note is midway between bond
ana an ordinary time loan. IL happens to hit
the prevailing fancy of investors To a cot
Needless to say these note issues have
proved very profitable to the bankers hand
ling them, owing to the ready sale obtain
able for them. There is. however. another
side to the picture. There will fall due in
eighteen months to two years from now a
large miss of loans, which will have TO be
permanently funded. Is there any guarantees
that the bond market will be much better
at that time than ii would have been now
but for these note borrowings The chances
are, OF course, that il will be better but
90 the chances favor its being very much
1t must not be forgotten. moreover. that
when the time comes there will be n fresh
batch of commissions to be paid TO bankers
in connection with the funding of this semi
floating debt-the double commission will
be so much net loss, anyhow. VIII il not
be large enough to offset such differences
as there may be between the bond market
then and the bond market now2
These are questions that time only can
answer Meanwhile. IL is quite certain that
the corporations borrowings have mopped
up great deal of money, Il present which
VIII doubtless, in a large measure be dis
trlouted in the shape of wages and pur-
chase of material Ii becomes very clear
that We shall not find ourselves in posses
sion, this year. of "A large fund Of surplus
money, which might be expected 10 float
INTO the stock market in volume sufficient
TO make what is currently known as
bull market.-Wall-street Journal
There is still a great deal of uncertainty
as 70 when the Panama payments will be
made-an uncertainty which has contribu-
ted to unsettle the foreign exchange mar
ket. These payments may not be made for
two months yet. Paris evidently anticipate
ing by drawing gold from this side. Thus
tar no great amount has gone out. but
increase IN the volume would not be sur
prising- Just how much gold will be lost TO
The other side is. of course, merely guess
work; the amount is put high S.
100000. Less than 100000 has already been
shipped, so that at this rate the movement
Gus factors can, of course. tend TO dimin-
lsh the probable outflow. nOticeably the
condition OF the New York money market.
Now that the Bank of England has re-
duced its rate, stiffening in prices at New
York would tend To restore the equilibriurs.
United States Investor.
A high record made in the fall OF
1903 for shipments of currency from New
York TO the interior Since the middle Of
February new high records for net receipts
OF currency from the interior have been
made every week.
The total gain i'm the nine weeks ending
April II. 1894. was SD 2s4 900. For corre-
spending weeks in prior years there was a
net gain of &. 200 in 1905, a net loss OF
sl2bs. 100 in 1902. and "A net gain of S4.fl5, 800
In 1901 The record follows
Net gain from the interior from the mid
ole OF February TO ADrii