Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-09-09
Prices Move Up Toward Close
in the Street.
GOLD SECURED FOR IMPORT
Benefcient Attitude of Treasury Pre-
sumed to Be Safeguard.
BANK FIGURES SHOW A DEFICIT
Not Since Financial Depression of
1898 Has There Been Such
Material Difference.

NEW YORK, September S.-Prices moved
up aggressively today to. strong closing
after the publication Of the bank statement
showing a deficit below the regal reserves
of s6.577,925. This was accepted as an ex-
preston of unimpaired confidence on the
part of the powerful spectators who have
the present market in hand, of the ade-
quacy of available resources to replenish
the deficient supplies of money and to main
tain the prices of stocks in the market 1t
is pointed out as justifying this confidence
that upward of 100000 ard possibly more
than ST., 900 will be available to the New
York market on Monday when the treasury
order for deposit of government funds
against gold engagements goes into effect
those figures representing the estimates Of
the amount of gold already secured for i'm
port. 1t is added that the benehcent attl-
tude of the treasury authorities to SAFE
guard the money market against harmful
strngency may be assumed and That means
for inSuring this Will remain at the COLI
mand of the treasury.
This will include the amount advanced
against the gold imports, which will be re.
turned to the treasury upon the receipt OF
the gold and wild be available Tor use In
other measures for later relief. The feellng
of confidence on this score was by no means
universal, however. the amount OF the deh-
cit in bank reserves proving ratner stag
gering coming on the threshold or the
annual flow of currency to the interior from
New York. Not since the financial depres-
sion of 1893 have the bank figures shown
such a deficit, when clearing house certii1-
Gates were issued in New York during July
and Aug asst. Foreign stock markets were
disturbed today by New York'S heavy requi-
sitions for gold and discounts advanced In
London and Berlin. the rate in London ris-
ing above the banks otficiai rate ana 1ore-
shadowing an advance by that institution.
This weeks outgo of SIG, 40S, 100 cash from
the banks measures the full loss by the
known movements OF money, correctS the
discrepancy shown in last weeks state
ment and leaves several million COLLARS sui
to be accounted FOR
1t is probable that New York trust COM
panieS have begun to withdraw cash from
the New York banks to increase their casn
reserves in compliance with the law Whlch
REQUIRES them to hold per cent of deposits
in cash on October 1, compared with the
3 per cent required after July l. Inc IN
creased obligation will call for an addi-
ton of about S1O.O0O,OOO to cash holdings
of the trust companies. The market closed
strong near the top. Total sale of bonds,
par value. s73200O.
Fight With Stringent Money.
The stock market has contended this
week with the disadvantage of the strin-
gent money market. and has made head
way against it, but in an Irregular and
hating manner A handful of individual
stocks have risen buoyantly with SYM
pathetic sustaining influence. In the gen.
eral list, however, the conflicting move
ments have largely offset each other, either
during the course of one days trading or
by retracing the movement of one day on
the following. Speculative excitement has
continued, and sentiment has remained on
the side of the bull element but the bulk
Df the ODpratiOnSl have been of DrOfeS-
sional' character or in the hands of the
powerful capitalists who have held the
market in control. -.'.
A number of important developments
have stimulated the speculative spirit and
Influenced market operations The largest
share of attention has been given to the
money situation, both present and prospec--
tive. and this has been the only apparent
check on the rampant spirit of speculation.
II was plain from the beginning of the
week that the money conditions in New
York were acute. and that the depletion
or loanable funds had reached a point of
practical exhaustion. Call money loaned
at 30 per cent ON Tuesday, the first bust
ness day of the week. and at 40 per cent
on Wednesday After business hours on
Wednesday the announcement was made
at Washington that the measure of treas
ury aid to gold imports, which was adopt
ed last April would be put in force again.
put not until Monday. AS availability of the
facilities thus extended for securing gold
abroad was thus deferred, money on call
again rose to % per cent on Thursday. But
the high prevailing rate had the effect of
attracting sufficient funds from outside
sources to break the rate to below per
cent before the close on that day.
Position of the Banks.
The position of the banks disclosed In
last weeks statement and the currency
movement of the week offered ample ex-
ample Of the money stringency. the sub
treasury operations alone had withdrawn
from the banks by the middle of the week
almost double as much as the total surplus
above legal requirements shown in the last
bank statement, and shipments to the in
terror through other sources to meet har-
veSting needs were on large scale Lon
don and Paris interposed obstacles to the
withdrawal of gold by New York and the
necessity of stock market LIQUIDATION seemed
imminent. The full effect of the decision to
advance government funds to national
banks to the amount of gold engaged
abroad for the period of transport, thus
saving interest charges to the banks will
not be known until next week when the
order becomes effective. Assurance Is felt.
however. that a considerable amount Of
gold will be shipped to New York next
week.
Effective for Gold Export.
The effectiveness of this device for en-
couraging gold imports when 1t was adopt
ed in April last was obscured by the at
tendant circumstances. New York banks
had the means OF awaiting themselves Of the
facilities before the facts were known In
foreign money markets. and this enabled
them to secure the requisite supply Of ex-
change bills in the market before the price
was affected by the publication of the
Treasury Departments plan. The notice in
advance in the present instance does away
with this advantage to New York banks.
In April the San Francisco disaster fol-
lowed Immediately after the plan was in
operation and changed the whole face of
the exchange situation. with an imperative
call for remittance to this country without
regard to the effect Of the treasury aid.
The violent rebound in foreign exchange
rates in New York this week caused by the
news of the Secretarys order shows the
tendency to an automatic adjustment of
the exchange market to the new conditions
presented. The question of the adequacy
of the relief TO break the money stringency
Is brought forward by the small effect pro-
fuced on the market for time loans, which
continued to command ~ to 8 per cent for
sixty to ninety days use after. the adop-
zion of the treasury measure became known.
American Gold Factor.