Pine Bluff daily graphic., 1905-11-16

able to the banks and would rot he
used by them except during periods OF
high money-that is. during the crop
moving season.
When general prosperity and bouA=
tiful crops cone together the STRAIN
men the circulation is so great, say
the responsible officials OF the treas
nrv. that the inefiiciency OF present
!lws Is clearly demonstrated Then
Stock gambling acccntuates the de
ticicncy 1t is the custom OF bank
ers everywhere to send their surplus
funds 10 centers where the demand Is
kcencst and where the money VIII
readily be loaned. New York is the
favorie place. In times Of ordinary
business prosperity and during the
crop growing season large sums ac-
rrn,ulate in New York City banks
belonging to the national banks al
over the country. AS these funds are
Withdrawn money becomes tighter IN
New York, and every fall, as the crops
are harvested. and later, as the crops
are marketed, the money rates IN
Wall street advance. Under ordinary
circumstances the season is tlded over
with only a furry but last Saturday,
as in September. 1902, the natlohai
in
statement of condition displayed a de-
licit in surplus reserve OF % per cent,
while national banks in reserve cen
ters are required to maintain sur
plus reserve of 90 per cent. ana the
national banks in the smaller cities
and towns surplus reserve of only
IS per cent. The disappearance OF
the surplus reserve of the New York
banks indicates that their loanabie
funds are low. This has been caused
partly by stock speculation and partly
by the withdrawal of money from
these banks by interior banks. The.
outflow of money in this way was in
excess of $4,000, 900. as shown by Sat
urday's statement, during the five pre-
ceding days.
Crop moving demands generally
slacken in October. but this year the
business activity is SO great that the
Lational banks throughout the coun-
ri itIO
funds from the New York institutions.
1t may develop that this phenomenal
prosperity will continue until the New
York banks do not hold a dollar OF
the oanable funds of interior banks.
Money always seeks the best market
and the stringency of funds in Wall
street is good sign of booming bust
n1 SIS. 1t is this peculiar business sit
alton which is receiving the attention
of Secretary Shaw. Our inelas'ic
currency may net be sufficient to cap
italize our great prosperity. There is
a possibility that our wonderful
growth may be checked by our cur
rency system, which cannot readily
adjust itself to new demands.
While Wall street is howlin
cause of 20 per cent call money. the
national banks have under control an
ef!cctual means of relieving string.
ency--one which would not be disap-
prove by treasury officials. 1t can be
stated upon the highest authority that
the secretary of the treasury would
, not censure national bank which
used its surplus reserve TO tide over
!; temporary stlingency. Secretary
Shaw has received no advices indicat-
ing that s,rinSency exists. in busi-
ness centers. He understands that in
New York where call money is loan.
cd all 20 per cent. commercial loans
are still made at or below per cent
, Should the demand for money grow
SO strong as t0'~require raising OF
rates to the productive business in
, terests the n anufacturers. transport
ers and merchants-the bankers
! would rot bring frown upon the
brow al the secretary by resortins to
he reserve fund.