The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1904-01-01
FINANCIAL REVIEW OF =
THE YEAR JUST CLOSE
EAR BEGAN WITH PROSPECT OF TROUBLl
Overexpansion of Credits and Great Imitation of S
curity Values Were Danger P~Oints-COuntry
in Good Financial Condition Now

early last year. that the country's fnan
prosperity was not on a sound enough %
was the action Of the New York clear
house in adopting a rule that all trust q
panies which belonged TO the Clearing 10
Association must establish Il cash reese
in their own values against their agl
gate deposits. The basic reason for
action by the clearing house was that
trust companies were not required by
to carry a single dollar Of reserve and
these institutions were the heaviest inv
ors in the securities whose values a 81
time later began TO decline.
Some of the largest trust companies
New York were lending millions and
lions OF dollars on securities and they v
keeping no cash reserves. The action
the clearing house, which required
trust companies 10 Immediately estah
q cash reserve against their deposits,
once occasioned apprehension as TO he
dition Of the trust companies and also a
the effect OF the locking up Of several
lion dollars in the trust company va
the money being withdrawn from the
where il was the basis Of outstanding
il. There was nothing wrong with IN
companies and the apprehension oyd
condition. occasioned by the
houses action, has been proven
less by the events since that tlh
the locking UP of this money as tru
pany cash reserves. did not increa
terially the then growing severe col
of the money market.
TRUST COMPANY RESERVES 7
FICIAL.
On the other hand, the establishn
reserves by trust companies has pro-
element of strength 20 them, and
questionably benefited them duriu
long-continued depression in Wall
A few trust companies. 10 be sure. !
gone down, but the collapse OF these {
panies was not related 10 the appreherl
about their condition caused by the 4
ing house requiring them 20 establish }
reserves. This was the first cause OF!
prehension in the financial world earl
the year 1908.
This brings the history Of the fin
stringency in Wall street in 1903 do3
the point where the decline OF securit
ues had begun 20 seriously depre(
longest the money market. The
real apprehension was occasioned
congested condition of the money
the conversion of floating capital inty
capital by syndicate operations AMI
needs of the railroads, and the i'm
financial Indebtedness abroad; n
in the second cause, the withdrawal o
ital from investment as a direct res
the distrust created by these conditid
Just at this time the possibility o
gress passing a bill TO make the Gu
system more elastic figured largef
the Wall-street financial situation.
street pinned it's faith on the passage
Aldrich bill. Wall street seemed 70
that IL the Aldrich bill should become
1t would speedily relieve the congestl
the money market and clear up ger
the financial situation. But the AldIl
was not passed. and still the coun
not experience a financial crisis.
CHANGE IN SENTIMENT
AS the rear wore on. the 81
regard to the financial situation
a great change, and finally assn
tagonistic attitude toward finan(
rency legislation. And when
Roosevelt sent his message to [
little was said concerning hnaI
ton. The matter was left aloi
II is the general opinion Of
fnanciers, the administration I'd
tude that the making of a reco
for decided and extensive cha
currency system would tend 10
hension that the government
financial situation 10 be in su
condition that IL was necessary
by changing the currency systd
The third apprehension In
community last year was the so
eral feeling early in the sunni
that the banks would not be aid
the harvesting and the owe
crops. But the banks were abb
all the money needed 10 harve
the crops, and at the same tin
able 10 relieve temporary str
Baltimore, Pittsburg and ST.
predicted panic. to be caused
ment of the crops. did not mate
slightest degree, and millions O
10 the West and South to harv
the wheat and corn and cotton
returning TO New York i'm a Lar
OTHER APPREHENs
Another apprehension in
community was the fear OF
action in trade as a result Of 4
In the demand for iron and &
condition has been counterbalj
tension Of our foreign trade.
duction in prices has undoubti
new impulse 20 the domestic
certain lines.
Still another apprehension Of
community was that our fore
reached it's height three mo-
statistics upon our foreign
past two months have cispell|
hension completely. So great
balance Of trade in our favor,
the immense cotton exports,
try has been able 10 wipe on
foreign indebtedness 10 Eurd
against II at the beginning q
The country is now upOn
and safer financial basis thar
ago, and there is now M
serious financial troubles.
be as plentiful this year as
months ago. perhaps. but
enough money 20 carry on
ness and for millions Of dol
and general industrial inn
deed, the year 1904 is ushe
financial outlook OF this cou
In n Position Of Ap
with s1,SO.00O OF a r~einfor
dowment funds Chicago Unive
tion 10 clearly recognize the
advances in refined p%etroleur
patch.
LAST