The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-11-11
FINANCIAL AND COMMERCIAL.
SATURDAY,, Nov. 10

NOV. W.
A weekly bank statement showing that
the SURPLUS rtservc Of the local Clearing
House institutions was "A million and u half
dollars below the legal minimum and a
formal announcement by the Secretary
OF the Treasury that he did not propose
TO take any steps for the relief OF the money
market until conditions Of stringency
became more proE vnced that they wer'
might very well have suGRced to bring
about a much greater decline to-day in
prices Of stocks than actually occurred;
and had speculation of late been active
rather than almost absolutely dormant, it
il un1uestionable hat a sharp break in the
stock market would nave followed. That
a. decline of this character did not take
place, and that prices only slightly re-
coded upon such u~nfavorable news affords,
Of course, strong evidence that the market
10 under assured control n that the people
who are now carrying stocks for specula-
tive purposes are in the main those who
have already amply provided themselves
with financial resources for doing 50. A
bad bank statement was entirely antici-
pated and prophecy regarding it was surely
enough made in the sharp advance in call
money rates yesterday. 1t was known
that there had been during the week a
further shifting of loans from the local
banks to institutions whose transactions
do not appear on the Clearing House sheets,
that is to say mostly to private and out
of town lenders. This process has been
going on. in fact, ever since time and call
money rates rose above 8 per cent. and
by means of il the banks at this centre
have been able TO meet the heavy emands
made upon them recently for the means
of making payments for the large quantity
of stocks sold in this market in the last
fortnight for London account.
Bank loans were therefore to-day re-
ported as having decreased s7,272, 100. IL
was also realized, however, that through
the operation OF various causes to-day's
bank statement would make up" those
losses of cash by the banks that have
actually taken place during the last two or
three weeks and nave not been fully re-
vealed in the weekly Clearing House ex-
hibit. Therefore the decrease in cash
holdings shown by the banks in to-day's
report Of ss,s3l 900, or s. 900 900 more than
the largest public estimate thereof made
yesterday, was by nc means unlocked for
by those having access to good sources OF
information. and the net result OF a deficit
of 81 ,5l4, l25 in the IS per cent. surplus
reserve required TO 5e carried by the banks
took few people by surprise. 1t has all
along been the hope of Wall Street, how
ever, that il such a state OF Affairs as this
was shown the Secretary OF the Treasury
would again come to the aid Of b money
market as he has done on so many occa-
sions in the last few months, and this hope,
il may be sid, was not entirely dispelled
by the Secretlry's outgiving on the subject
to-day Atany rate. no perturbation worthy
Of the name appeared to be felt over the
situation in the financial district, and for
this the abundant reason was that times
nave been very few when the bank reserve
here has long remained below the legal
limit. and that in one way or another a
money situation that has reached this
point usually rapidly rights itself. For
me thing. the London financial settlement
begins next Monday and will soon be over,
80 that the pressure TO remit money abroad
which has been the chief source Of the
strain upon banking institutions here dur
ing the week will cease. There are no
longer any acute fears Of a further advance
in the Bank of England's discount rate,
as the banks weekly report of condition
published last Thursday showed that its
reserve is enlarging in a very satisfactory
manner. While actual cash has not been
transferred from the Bank Of France to
London. the French bank has SO released
It's grip on credits as TO case the situation
in London in an equally satisfactory way,
and the entire foreign financial position
appears to be strengthening
Aside from the election result the depo-
sition of Stuy vssant Fish from the
presidency OF the Illinois Central Railroad
Company and the sui stitution in his plIce
Of one representing the Hartman or Union
Pacific interest and a large Increase in the
wages OF employees by the Penns lvania
and one or two Of the other Leading railway
systems have Leen the events OF importance
81 the week in financial circles. Price
movements in the stock market have / cen
almost without consequence. Minor an
nouncemeuts hav We lcen those Of an increase
Of preferred stock capitalization by the
American " oolcn Company and Of "a large
and long anticipated stock dividend by the
Pullman Palace Car COMPANY. Favorai le
weather conditions have stimulated trade
in every direction. the mercantile agencies
report that financial collections were never
better and the general prosperity Of the
country remsiEs without shadow. Even
10 Wall Street, where spectators for the
fall nave endeavored to get up as much
pessimism. As posi- lie over the money
situation, confidence is pr.cticany universal
of an improving market for securities later
on.