The Birmingham age-herald., 1905-10-08

road upon the surplus was thus limited to S3,153,S50 bringing that item down to $4,2S6,175. The loan contraction Is believed to be due largely to the taking over of loans from the banks by out-of-town in stitutions, which have drawn on their New York deposits for that purpose dur ing the week.
 Total sales of bonds, par value, $1,750,- 000
 The continued high rate for money this week has surpassed any great specu- lative activity in stocks. Early in tho week the money market gave indications of relaxation from the strain of the special causes which made nasty de- mand upon banking resources, and the market showed evidences of positive strength When money rates tighteled again. active attempts to lift prices was dessted from, and a dull resistance to depression took the place of the ad- vances.
 Attention has been almost exclusively centered on the money situation and some of the developments of the week have awakened discussion taking on the pro- portions of controversy. Last weeks bank statement furnished the text for much of the discussion owing to the in congruity of it's showing with the known facts of the situation. By reporting an increase in cash on hand, and decrease in the loan account with resulting benefit to margin of the surplus reserve, the banks were at direct variance with the known movements of money for the week, and with the heavy loan operations known to have been conducted. Ihe criticism of the bank statement culmi- mated at the annual meeting of the clear ing house on Wednesday, when the pres ident of a leading bank denounced the bank statement as farce in purporting
 I.I t..IA r.f financial situation. In the same connec- ton was sounded a note of warning of the menace of the danger the freedom Of the trust companies from any cash re- serve reform in connection with the heavy loan operations by these institutions. The protest of the banks has had Its motive of self interest, which Is easily explic- able.
 The two per cent allowed by banks on tiust company deposits gives the banks the use of those funds only while inter- est rates are low but when profitable rates are ruling, as at present, the trust companies draw on the banks to place loans on their own act to practically the full amount of their resources. It is the general supposition that tfthe heavy loan contraction by the banks during the last few weeks has been taken over almost entirely by the trust companies. Certain ly there naS been no SNlutHCe ol iedi iqui- dalton in the securities markets. The con sequence would be that no real reduction of depost liabilities has occurred to keep mace with the drain on bank reserves dur ing that period. All but a small percen- tage of trust company cash Is on de- posit at the clearing house banks, and figures in their reserve, which therefore constitutes almost the only reserve agree ment between trust and bank deposits.
 Abundant experience proves that secur- ity does not extend to borrowers who em- ploy funds to hold securities on margin. The purpose avowed by the president or ImperjaI bank of Germany in advancing the discount rate to put brake on specu- latfon was not without effect in sentiment in New York.
 The progress of the investigation of life insurance methods is of sentimental influence in the stock market. Disclosures of the arrogation of discretion to decide on the questions of propriety and of com pliance with the letter of the law on the part of the men powerful and influential in the financial world had its part In the skepticism felt toward last weeks bank statement.
 The dominance of the money situation movements within a narrow range, and has kept other considerations in the background.
 demand.
 2's coupon 1ac, the 3s registered 54c and the week.