The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1906-04-15
THE MONEY SITUATION

R6CuCenoSS mas maze MS way CnTu Bow
eral succeeding periods Of tight money,
doing little for relief, must have con-
Guided that at last q degree Of legiti-
macy insuring immunity from hostile
criticism had developed, for his action
Of yesterday in permitting New York
bank to draw gold from the govern
ment treasury indicates a greater use
Of the discretionary power appertaining
to his office than anything seen here
tofore. t.- Ia H.. - . 49,: 49,
Contrary to precedent, the New York
Stock Exchange, which often closes
from the Thursday before until the
Monday after Easter, continued doing
business on Good Friday. The money
situation was so uncertain that it was
considered safer to keep open than to !
60 over a holiday subject to changes
that might affect interest rates serious
~ before reopening. ....
| Altho New York is ono Of the great
est financial centers and in some re-
spects rivals London as a world money
market, conditions are subject to re-
markable variations. This is especial
ly true Of short-time borrowing. Call
money higher than per cent in Lon
don or Paris would be remarkable.
Ten per cent call loans would be sensa-
tional. Yet in New York rates run
up with lightning rapidity when a
squeeze is on and phenomenal figures
are seen. Over 125 per cent was paid
for short-time loan in the last great
advance and 100 per cent is reached on
the average every three years.
At present, interest is mainly di-
rected towards the loan item in the
financial reports and speculative com
ment covering the situation deals al
most exclusively with the supply out
look. The New York banks dare not,
at present, 90 too far in the loaning
out Of daily balances, even tho the
money be subject to call, for CONNER
cial requirements must have first con-
sideration. This is the legitimate side
OF it, and, for the greater period of
every year, purely legitimate consider
at1ons are dominant. The present sit
uatlon reflects in greater part an hon
est. demand and echoes the cry Of the
country for more money to do business
with while the high rates more recently
recorded, tho subject to suspicion, were
IN reality traceable more to natural
and healthy causes than those high
figures for some months ago. A bank,
having some millions unemployed on
balance Of one day, may appear as
, free lender of money on call and dav
or: two later, under pressure of CONNER
, cial demand or call from interior cor
: respondents, may be compelled to draw
back the money. Yet such is the coun-
try's suspicion of Wall street-iustifi-
able to, some degree in the light Of his
fhof ~
representatives Of increasing business,
and testifying to greater general pros
/ perity, now fails Of recognition and the
country, feels that interest rates are
again being mani pulated and that the
money market is Hrigged.' ~
The .unfavorable feature, be the.vtew.
point commercial, investment or specu-
lative, is the close connection between
the larger corporate banks and trust
companies and large private banking
houses and the interest in stock market
affairs maintained by their directorates,
that overlap and intertwine and find
representation also upon the boards of
| the great railway, Industrial and insur-
| ance companies. Thus, tho it might be
difficult to trace the operation even
| alphabetically and wholly impossible to
prove a case, it is generally accepted
that the Standard Oil interests and
other great financial alliances have the
power at times to harden the market
by cutting off the money flow at the
fountain head. AS easy money means
increasing speculation and buying of
stocks and tight money means the sell
ing out Of holdings and declining prices,
the inference is obvious. There is not
the least doubt that in times past the
screws have been put on and money
purposely frightened up to cause g. fall
in the stock market, a1tho since the re-,
cent insurance revelations the manipu.
lators have moved with extreme eau.
I ton.
II A great difference between the New
York money market and the European
centers is the comparatively stronger
speculative spirit on our side. Great
deals are handled in London, involving
enterprises the world over, and in Paris
| Vienna or Berlin millions in securities
change hands daily. There is speoula
tlon-Perhaps in a way as much as in
T New York-but in no other market il
speculation so fostered and apparently
! so predominant in thought. Statistics
are wanting, but there is little doubt
that relative to population the humble,
! in America who have an interest il
| speculative affairs is greater than il
Europe. -.s..-. ...> 1
l This is not wholly bad thing. Many
i condemn speculation absolutely, and
! indeed, It has many bad features. But
| nearly every economic writer has come
| to recognize it's utility There is kept
alive in New York an interest so large
| that millions in existing securities ma,
! be thrown in for liquidation ane
turned into cash in an hour and in ia
vorable times millions of new issue,
are absorbed in day When specula
tion goes too far and uses up money
that ought to be employed in CONNER
cial channels, it does injury, but usually
the remedy comes automatically Our
is a country in which speculation ap
Fl parently is to remain, for it is coun
try Of big things in finance put thr,
Il with snap
CHICAGO LIVESTOCK