Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-10-15
The Bank Statement Proved
an Enigma Again.
MARKET IMP ASSIVE
SHOWING DECREASE IN LOANS
OF S2e, 456, 900.
Dealings Have Indicated Some Liqui-
dation During the Week-For-
eign Exchange Strong.

share in banking operations by institutions
outside the clearing house which do not re-
port results to be included in the bank
statement. The stock market remained i'm
passive on the appearance Of the statement,
and fluctuations were feeble. with the clos
ing easy at small declines The attendance
at the stock exchange was small, owing to
the large number of absentees at the auto
mobile cup races.
The bank statements showing of a de-
crease in loans OF SO 600 makes rec
ord with the sole exception of the reduc-
ton for the first week of September. Re-
payments of temporary borrowings by the
city of New York with the proceeds of the
yearly tax payments figure in the showing.
1t is also believed that out-of-town insti-
tutions have made loans during the week In
displacement of the New York bank loans.
Loans by local trust companies are be-
lieyed to have played a small part in the
results and the recent lending of foreign
funds has also come TO a stop.
The stock market has indicated some
liquidation during the week, but nothing
like the figure reported in the bank state
ment. Preliminary estimates of the cash
change. based on figures supplied by the
banks themselves. had promised an In
crease of about million dollars. while the
bank statement shows actual decrease
OF $3.50, 800 No explanation is offered for
the discrepancy except as 1t may represent
rectiiication of previous statements
the cash reserves.
The Foreign Exchange.
TIE foreign exchange market was I'M
usually strong for a Saturday, and 1t was
reported that an active demand for bills is
due TO buying to cover maturities of former
sterling loans. Other large maturities of
this character will fall due during the COM
Ing week. Sterling exchange declined at
Paris a 0Y
withdrawn from the Bank of England for
shipment to France Sterling exchange re-
acted slightly at Berlin, but discounts ad-
Yanced again at that center, at Paris and at
London. The international pressure for
gold is shown to be fully maintained by
these several developments.
Total sales of bonds, par value, So, O12 600.
Prices have moved irregularly through the
week in dull market, and did not lose
ground greatly at any time. Rates for
money have moved upward in all great
centerS or capital on account of encroach-
ments upon reserves for purposes of the
circulation and coincident large demands
for credits. Meanwhile all reports bearing
on the progress of commerce. industry and
agriculture bear evidence of so high de-
gree of prosperity in this country that
holders OF securities continue extremely re-
luctant to part with their holdings in the
confidence that the future promises higher
values when temporary exgencies in the
money market are once met.
The conviction is general, however. that
the satisfaction of these exigencies is not
yet completed. This prospect has begot
conservative spirit in the making of pres
ent ventures in che stock market, and has
been the motive for some public admoni-
lions to caution from quarters that were
of special authority with habituaI opera
tors in stocks
Vanderlip's Address.
Advice of this tenor has been offered from
many quarters for some time past, but its
force and effect were crystallized In the ad-
dress of Vice President Vanderlip of the
National City Bank before the American
Bankers convention in Washington. Mr..
Vanderlips utterances were of the greater
force by reason OF the widespread conse-
quences which followed similar utterances
before the same body on two previous oc-
casions.
The memories OF Wall street operators
recalled with vividness the emphatic re-
Spouse Of specula tive markets to this bank
er's warnings against unwarranted specu-
lative imitation in the autumn of 1907,
which the signal for the beginning of
a period OF liquidation lasting practically
throughout the following year.
Mr.. Vanderlip's intimate association with
group Of capitalists whose opinions and
intentions are looked 10 for guidance by
following larger than any others in the
country made his Views find acceptance as
representative OF this influential group. AS
first known to Wall street few lines OF the
address dwelling upon the factors IN the
outlook calling for caution and restraint
were published alone
sonnet hing like a chill of apprehension per-
Yaded the financial district when ii first be-
came known that the vice president of the
National City Bank had said to his fellow
bankers that should stock market specu-
lation start from the present high level of
prices in the face of the extraordinary de-
mand for money and capital which crops
and business alike are making the result
might easily be temporary disaster"
The sentiment so exactly conceded with
misgivlngs which had been growing in the
minds OF stock operators that the immed-
ate effect TO throw the market into
some disorder Quieter conditions were re-
stored when the optimistic tenor OF the ad-
dress whole studied and when the
National City Bank appeared In the market
as large lender OF call money, and stocks
regarded favorites with that group of
capitalists were seen TO be supported Nat
uraily. however, speculative operations for
an advance were greatly curtailed.
Course Of Money Market
The course of the money market during
the week has reinforced the counsel Of eau
ton In speculative extension. The Bank of
England RETAINED from advancing its dis
count rate. and It was reported that the
Bank OF France was parting with gold for
Egypt TO relieve the large drain on the
London money market.
But the large loan reduction made by the
Bank OF England and its measures TO make
its discount rate effective IN the open mar
ket were supposed TO point TO the likelihood
of an advance in It's own rate later on
Discussion was reviewed OF the forthcoming
Russian Loan its probable large amount
and the prospect OF large American par
Jicpatiou in IL.
Foreign exchange in this market moved
away from the gold import point in re-
Spouse to the higher money rates abroad.
RumOrs were circulated of an intended
redeposb in national banks of a portion OF
the government surplus, but theseSfailed OF
official confirmation.
Interest Rates Advanced.
Time money rates and interest on COM
mercial credits moved upward, and there
was some calling Of loans at the stock ex-
change. The higher rates for interest re-
duces the profit the holding OF dividend
paying securities on margin and adds to
the vulnerability OF the market to pressure
The moderate return on securities at the
present high level of prices contrasts with
the rising rate OF interest on loans, pointing
TO the opportunity for profitable use OF
funds in other fields than the securities
market by reason of the great activity and