Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-04-15
Most Important News Of the Half
Day Session.
MONEY sTRINGENCY A FEATURE
Confidence in Soundness of General
Conditions Continued Unimpaired
Crop Figures.

of interesting discussion and comment The
most important item of news was the an
nouncement of the Secretary of the Treas
ury that banks which have engaged gold
abroad will be allowed to withdraw its
equivalent in cash from the treasury upon
giving security in bonds pending the ar
rival of the gold engaged.
The effect is to give the importing banks
the use of the gold engaged In their re-
serves as soon as secured, thus saving the
loss of interest while the shipment is In
transit and increasing the control of for
eign gold supplies to that extent 1t was
announced at the same time that 81, Co.,
COO had been already advanced by the treas
ury for this purpose in addition to the de-
posit of S1,00O.OOO with the New York
banks on account of excess of revenue
collections over disbursements.
In addition to the gold engagements an
nounced earlier in the week. there were
up the total equivalent of the advances by
the treasury.
The fact that this arrangement went into
force on Thursday was a total surprise to
the financial community In general. 1t was
a matter Of comment also that the cash re-
serve item in the bank statement as pub
ished failed 10 reflect the appearance in
the reserve of the cash deposits by the
government as above indicated The in
crease in cash shown by the statement
amounts to 81 1875. 900, which does not more
than cover the gain on the known move
ments of currency for the week without
counting the increase by the government
deposits against gold engagements.
Heavy Loan Contraction.
The heavy loan contraction of s25, 434, 200
effected so considerable d reduction In the
deposit liabilities as to cut down the re-
serve requirement to the extent of $780,
go. Joined TO the cash increase this was
sufficient to wipe out last weeks deficit and
to establish a surplus of s4,772, 800. The
breaking of the stringency in the money
market is thus abundantly explained. The
resulting rise IN the stock market contin-
ued up to the closing, which was strong
and active
Total sales Of bonds, par value 81, 04O 600.
The stringency in the money market has
brought some alienation this week by the
force of its own tension. This has been
principally by engagements of gold in Lon
don for import TO New York. The pressure
on the foreign exchange market became
severe by reason of the money stringency
here as to force the sterling exchange rate
down TO a figure where a command was
obtained of the Bank of England's hold
ings of British gold coins. AS Is usual
under these circumstances the bank pre-
ferred to surrender American coin and
bars but the price eXacted was the high
est limit to which the market could go
to give the preference over withdrawal of
British coin
The demand for exchange in New York
to cover remittances against gold engage
ments caused a violent rebound in the ex-
change rate which carried it decisively
away from the gold import point. The ef
feet upon the money rate in New York
underwent similar variations Money rates
fell away to nominal figures under the first
effect of the gold engagements and recov-
cred to q 10 per cent level with the recov-
cry in foreign exchange. There were other
influences at work toward relaxing the
money stringency and the commission on
time loans which was demanded early in
the week disappeared. At one time bor-
rowers for thirty days paid the equivalent
of per cent, for sixty days per cent, for
ninety days Z per cent
Persistent Money Stringency.
The week opened with money on call
from 20 per cent to rs per cent. The per-
slstency of the strlngency induced some
speculative liquidation of stocks and the
money market got relief in that way.
There was extensive selling of stocks In
New York against repurchases in London
and transfer Of borrowings to correspond
from this market to London, which ef-
fected an important reduction OF loans of
the New York banks or released their
available funds for the other demands upon
them. The monthly pension payments re-
duced the SubtreaSury abSorptionS from
the money market, although the payments
Of customs continued large. II was re-
ported that the Secretary of the Treasury
was pursuing the policy Of deposit In the
national banks of the country Of the cur
rent -r<sess OF government receipts over
expenditures, and this had the effect of
relieving the New York hanks of some part
Of the demands upon them for currency
from the interior.
The effect Of these factors Of relief on
the money market was so gradual and so
moderate as 10 emphasize the mscalcula-
ton Of the speculative movement, based on
the expected prompt relaxation of the
money market following the first of April.
The disbursement OF dividend and interest
money, the fixing Of the call for report of
condition of the national banks and the
beginning OF gold Imports We're successive
ly looked TO for the hoped-for release OF
banking resources for speculative employ
ment in the stock market, and the effect
in each case was a disappointment The
consequence has been to restrict the spec
ulative operations In stocks, but the mar
ket has been remarkably free from pres
sure OF foundations at any time. and prices
have yielded only slowly and stubbornly
and with tone Of resiliency In the inter
walls when pressure was relaxed The
Wednesday recovery was sufficient to wipe
out the price losses of the two preceding
days and bring prices back to the closing
level Of the preceding Saturday. Conf
deuCe in the SoundneSs or general condt-
tons and In the promise OF continued pros
porous conditions seemed unimpaired.
Government Crop Figures.
The government crop report on Tuesday
estimated a condition of the winter wheat
crop as OF April / not fully up to the specu-
latlve anticipation. but the condition esti-
mate, considered on the basis OF the acre
age Of the crop. offered an indicated crop
as large, with the exception OF 1901. as any
winter wheat crop IN the eountrys his
tory. and the secondary effect Of the report
was helpful 20 stocks. Iron trade statistics
showed a record output for March. and
with an increase In furnace capacity on
April L compared with March l. while
stocks on hand continued to diminish. Pur-
chases Of Iron for future consumption. are
increasing, although with some price con-
cessions. and purchase Of steel rails and
other lines Of finished product are on an
enormous scale.
railroad earnings continue to make ex-
traordinary comparisons with previous Pc
RODS, although some effects on traffic is
conceded from the interruption Of coal
output and from the restriction on some
lines OF Industrial output caused by IT, The
conferences over the attempted anthracite
settlement have been followed with atten-
ton and with some decrease OF the hopeful
sentiment for a settlement but the infiu-
ence on speculative sentiment toward the
market has been unimportant
Is