The Washington herald., 1906-11-19


local clearing house had shown mat the
surplus reserve of these institutions was
81 10000 below the legal minimum, and
this news was followed by the announce
ment by the Secretary of the Treasury Of
his intention not to take any steps, for
the time being at least, for the relief OF
the money situation thus created.
As the week opened too. labor trou-
bles upon more than one Of the great rail
way systems terminating at this center
seemed TO be impending
The selling of stocks. however. that oc-
CURED last Monday appeared TO repre-
sent more or less of a elimination of
sagging tendency in the market that had
been uninterrUptedly in progress for sew
eral days.
On the following day. however, the gen
eral aspect Of affairs frightened. The
average price OF call money, which was
10 Per cent on the day previous. fell TO
= per cent. and on the day following TO
per cent. On Thursday the ruling rate
was down to > per cent, and on Friday to
~ per cent. 1t would be idle to affect
ignorance of the belief entertained in
I
that this surprising relaxation in money
rates attested that the money market
was being or had been manipulated
Bank OF England a Gainsr.
The threatened labor troubles one az
ter another petered out. In the middle of
the week the Bank of England made a
statement Of condition exceedingly strong
Al.
month past. proving that it had heavily
reduced its obligations cOrresp spondingly
enlarged its cash, and had in general built
up It's reserve 70 a point that although
still low for the time Of the year was
still such as 10 remove all reasonable
ground for anxiety that the banks dis
count rate might suffer an elevation be
fore the year was out.
In high banking circles here the opinion
was again expressed, as it all along has
been, that the amount of our obligations
abroad has not only been greatly curtailed
since the beginning of the autumn, but
has at no time been as large as IL was
commonly supposed TO be. and proof was
adduced Of one substantial way in which
debts owing 10 Europe were being paid
of in the governments statement Of our
exports of domestic products for October.
published on Thursday. This put the
value of our foreign shipments Of mer-
chandise for the month at s.. 900 900
greater than for the same month a year
ago, and amply bore out the statements
that have been made as to the large in
crease in the English takings of cotton
from this side recently in its revelation
OF increased exports of the staple for the
month Of nearly Sl9.0o90l0 over those of
October 1903. Shipments of cotton in the
month were indeed the largest for any
corresponding period in the country his
tory.
Premiums on Money Disappears.
Regarding domestic monetary conditions
not only did call money rates steadily
weaken, but the extreme premiums on
time money disappeared. The feature of
the week in the speculative markets was
a vigorous and almost sensational ad-
vance in the price of the St. Paul com
mon shares. The stock in question moved
upward early $15 a share from its low
point on Monday. and a flood of rumors
naturally started partaking of the same
general nature as many that have been in
circulation for "a year Cr more past.
There is no doubt that at some time not
far distant the St Paul company must
make another large issue OF stock TO pro-
vide funds for its Pacific Coast extension.
as the money raised by the recent issue
Of securities of the company has been de
voted wholly to purposes Of general i'm
pr0vements, vet il does not seem 10 be
thought that any rights upon the stock
are Immediately forthcoming and stories
OF the passing of the company into the
hands OF other railway systems are aU-
IhOTitativelv denied,
BY all odds the most important de
VelOpment of the week from a broad
point of view was, Of course. the news
from Washington that the committee of
the American Bankers Association which
has been sitting there to consider plans
for the reform OF the currency system
had reached a unanimous agreement and
that a bill embodying these ideas would
be presented to Congress at the forth
coming session and be pressed for pass
age with the weight and influence Of the
entire banking world.
Confidence in Personnel.
The commission that has formulated
these measures is composed of entirely
representative membership and has at its
head a gentleman than whom none could
be a wiser, abler, or more conservative
guide, in the person Of A. B. Hepburn.
president of the Chase National Bank,
OF this city If a bill of the kind pro-
posed actually becomes law this winter
something viii have happened that viii
have far mole important bearing upon
the prosperity of the country in the COM
ing year than the recurrence even of this
years magnificent harvests; and with
out giving unqualified Endorsement to all
seems proper 10 say that the amendments
20 the banking laws recommended by
them are such as in general have long
been urged by those who have given the
subject deepest thought
The essential evil OF our prevailing cur
Iency system is its well-nigh absolute
lack Of elasticity. This has been amelio-
rated, or rather has been prevented from
working the harm that il otherwise
would. by the large additions TO the
volume Of money in the country that
have been made in recent years. and by
the ingenious If dangerous and probably
Illegal devices employed by the preesnt
SECRETARY of the Treasury 10 make the
stock of money in the country available
for business needs. Events Of the last
two years. however. have demonstrated
that conditions cannot continue as they
are for another season without imperil-
ing business interests in the gTavest man
Ter.
The situation has become such in fact
that the entire business Of the country
during the last four months of the year
IS practically held up" while the needs
OF the agricultural sections for money
with which 10 move their crops are salts
ned. In times when business in the coun-
try is slack these fall shipments of money
10 the West and South are Of small mo-
ment; but when business is active and is
particularly in such rushing state as il
is to-day, money stringency is created
each autumn by reason Of the causes
named that acts uDOn business as a frost