The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1906-12-27
WALL STREET NOTES
Money viii Flow to New
York the Rest of Week.
SHAWS RELIEF SOON TO END
Deposits Made by the Secretary Are
Subject to Withdrawal February 4,
VIII He Called For-Trust Com
panies Must Increase Cash Reserve.

! pAn1eS MuhA increase NASn NtNbeTNEs
New York, Dec 2s.--Advices received in
financial circles promise that the West
will send a great deal OF money here be-
fore January l. Bankers say there has
been phenomenal holiday trade ali over
the country and that the stocks of goods
remaining in the hands of merchants are
unusually low for this season. The public
have exchanged a great part of their
ready cash for goods Of all kinds and
this cash will soon find its way to the
point of greatest demand.
Western banks have had for some time
available funds to a large amount. but
have hesitated about sending them to
Wall street through fear that conditions
here were not all that they should be.
This apprehension, according to eonserva-
tive banking interests, is now passing
away and the belated movement OF money
toward New York will soon set in on i
large scale.
Last September Secretary Shaw came
to the aid Of the money market by de-
posting $z6900.000 with the banks on APP
proved securities. He has since deposited
100000 more, making total of S36,0O0.-
900 within about three months The I'M
Outstanding at the time these deposits
were made was that the Treasury could
Withdraw them on February, 1897. The
Secretary can, of course, extend the time
il ne wishes, but so far as is known he
has not expressed an intention Of doing
so.
As matters now stand there is no absO-
lutte warrant for belief that the Secretary
viii not enforce the terms of the agree
ment which the depository banks have
made with him and under which those
institutions may be required to return to
the Treasury on or before February /.
1897, the money placed In their hands by
virtue Of that agreement If this is IN
sisted upon il will be hopeless 70 expect
easy money in the first month Of the new
year At present Mr.. Shaw appears TO
possess the only information there is Oh
the subject
Not 50 long ago that bankers have for
gotten the circumstances, Secretary Shaw
relieved the banks by giving them
chance 10 buy Panama bonds at time
when he decided to withdraw deposits
thar he had previously placed with them
on the security Of bonds other than gov
eminent. The banks found it inconvenient
to comply with the order for the return
/. Of the deposits and bought the PanamR
bonds
Some brokers are wondering if some
thing Of the kind will not be done next
February. but weU-informed banking in
teIests ridicule the idea. They ask what
answer the Secretary could make TO the
country for Withdrawing funds that We're
needed 10 carry on its activities. and as
sert that there is no reason whatever 70
! look for "a further issue Of Panama bonds
or governments Of any kind. They look
for no further relief. and think none Is
needed. further than that the money now
. with the banks be left where It is.
II the currency bill becomes a law it
would make little difference whether Sec
rotary Shaw exercised his right TO with
draw the $36.O0o,Oo0 Of special deposits on
February ! or not, Tor as the Treasury
would then be required 10 deposit with
the banks everything above a fair work
ing balance, it would be merely a case Of
drawing in with one hand and pulling out
with the other.
, Under the provisions Of the act passed
in the spring to compel trust companies in
this State TO maintain a cash reserve
! equal to 5 per cent of deposits those in
J stitutons viii be obliged at the end OF the
year 10 lock up between COO and So
10000 more than they have been required
, to maintain heretofore
J The present requirement Is for reserve
! In cash of ( per cent but the maximum
/. required viii be reached at the end OF this
. month, and as the trust companies Of the
! State hold deposits Of about 81 900, coo, COO,
Of which more than nine-tenths are in the
. hands Of institutions in Greater New
York the additional amount to he locked
: up would be about 100000 600, il the COM
panies had not already anticipated re-
quirements probably to the extent of sew
eral millions.
Another matter which will involve some
disturbance Of trust company loans is the
, usual withdrawal Of funds over the end of
the year by depOsitOrs who transfer them
. to New Jersey In order to escape the per
sOn3l tax assessments on December 81.
Such funds placed with New Jersey trust
companies are. OF course. at once loaned
Z on call in New York, but the transfer al
ways adds 70 the disbursement at a period
: when there is heavy shifting Of loans fo-
other reasons.
The narrOwness Of the market was
shown by the fact that in the first hour
of business to-day there was only single
J transaction of 100 shares each in such
! usually active stocks as Baltimore and
S Ohio, and Chesapeake and Ohio while d
number Of other coal stocks. like Ontario
? and Western. Delaware and Hudson, Nor
folk and Western, Lackawanna. Erie first
! and second preferred, the Reading pre-
I ferred issues, and Virginia Coal and Coke
: were not mentioned at all in the first hour
? of business.
This condition was but little changed by
moon. the only activity among the coalers
being in Reading and Erie common. The
activity In Reading was based on the
I theory that the stock had been over-sold
on the recent decline, and traders bought
. in expectation Of a rally on the short in
tereSt.
Apparently the only bull argument that
+ operates in Reading nowadays is the
S Strong market position of the stock p
= and until others are found there is not
Y likely to be much of a falling outside the
: ranks of the professional element II
lReading has intrinsic merit at its present