The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-04-16
THE FINANCIAL SITUATION.

Practically the one and only matter that
occupied the attention Of Wall Street last
week was tho state OF tho money market,
and this was sufficient to give the financial
community what III on the whole, q
rather interesting experience, There was
general expectation q fortnight ago OF a
little monetary s~triugeaov for a day or so
around the hrs. Of April, because OF the
necessity, which every one realized, OF an
indrawinK Of funds by the banks in prCpara-
ton for the disbursements OF interest and
dividend money on that date, Yet as the
weak drew near It's close there was hardly
any rise In money rates to speak o., and
the feeling prevailed thai there would
be really no furry 10 money worth worry
ing over. But in the following week money
rose I % a high level, and 1t was soon evident
that there were forces making for q strin-
gency in money other than those Of the
financial exi4enoies Of hanks and other
institutions incident to the first Of the
month. throughout he week the local
banks lost steadily and heavily to the Sub
Treasury, the drain being nominally on
account Of payments Of customs dues,
but really, Of course, representing ship
menis of money to the interior Of the coun-
try. 1t was said, nc doubt truly, that
oer,a / especial reasons for monetary
strain had developed, one OF them being
heavy borrowing on a short time loan by
the municipal authorities OF the city OF
New York which compelled certain banks
who rather unWillingly made the loan in
question to contract credit In other direo-
tions. and another a temporary tieup Of
money in the State Of Ohio owing to the
legal tangles that had arisen there over
the care OF the State funds. Whatever
The cause. the Indications steadily pointed
during tho week 10 an ~unfavorable bank
return at the close OF the period, and these
indications were abundantly confirmed in
a Clearing House exhibit which reflected
tho weakest condition of the local banks
seen at u corresponding time for twenty
seven years and tho lowest bank reserve
Witnessed at any time since November,
1900. Even then, however, the stock
market was not particularly depressed
and, indeed, its strength was a mat
ter OF common observation and oon-
graduation. Only a small amount of
stocks Was offered for sale, and the I'm
favorable conditions that were shown
chiefly resulted in a mere contraction OF
Stock Exchange dealings. But in the fst
two days OF the following week-thut is TO
say, last week-the anxieties Of spectators
over the situation became pronounced
Call money on Monday and Tuesday ranged
for the most part between 20 and 80 per
cent. and timo none rose In a really SEN
s~ational way, premiums Of l, 2 and 5'per
cent, and in some instances much larger
sums, being paid for time funds for all
periods. Time money, in fact, commanded
higher rates than it did In the stress last
December. Under this, inc vitality, the
stock market declined vii considerable
violence; but sterling exchange declined
also, and on Wednesday, when il became
known that over 50, 900 900 in gold had been
engaged in London for import, prices OF
stocks rallied sha rply. In the concluding
portion OF the week activity on the Stock
Exchange was diminished, habitual speou-
lators oonfessing themselves more or less
uncertain over the general outlook, although
animated, as a rule, by the belief that the
path Of the market was upward. A favor
able impression was made. naturally, right
at the end OF the week by the announce
ment Of the Treasury Department that the
lTOV6TIlIUtlb WOulu htIOSlN WIN biV io
| tional banks on the usual security sums of
money equivalent to any gold engagements
made by them as soon as the engagements
were contaminated. This is in effect
an allowance 10 the banks Of Interest
charges on gold in transit and greatly
fa cilitates gold imports. The governors OF
the Stock Exchange took the unusual
course OF continuing the session Of the OK
| change on Good Friday, They were con-
trolled, doubtless. by an unwillingness to
subject the money market in its prevailing
delicate state TO the additional strain that
would have been necessarily imposed by a
three days borrowing Of funds on Thurs
day by customers Of commission houses
and others who il the exchange did close
would he compelled on that day to make
provision for payment on Monday OF
. stocks purchased UP tothe close OF business
on Thursday; and yet the action OF the
Governors really served TO emphasize in a
rather forcible way the stringency in the
money market that existed.
All this served naturally to bring abont
for the time being a feeling Of conservatism
regarding financial matters. II was not
that there was the slightest apprehension
r6RdTOlnR lne prosper Ivy VI buSlItHH'' Va ohy
change for the worse In fundamental trade
or general economic conditions. Indeed,
whatever difficulty existed seemed to be due
| to too much rather h too little general
prosperity. Wall Street was suffering, as
~seemed-and perhaps only in such small
degree as to entitle the affection TO a no
more serious am than a mere twlnge of
rain-from high rates of money caused by
tn. fact that people we're finding their own
businesses and occupations 40 profitable
that they we're no longer induced 10 buy
stocks and bonds In Wall Street yielding
them what were relatively low rates OF
interest. The events Of the week signally
illustrated what great proportions this
demand for money for general business
use was assuming. It became evident that
the money scattered over the country in
the january 1 disbursements had not re-
turned to the great centres. but was retained
in the interior cities and villages every
where for local purposes. and it was also
obvious that the calls on this city for funds
on April I we're not merely for the remit
lance Of dividends and interest, hut for an