Los Angeles herald., 1907-11-08
BIG CROPS
WILL BRING
GOLD TO u S.
PROTECTIVE MEASURES OF
EUROPE USELESS
CASH CONTINUES TO POUR INTO
NEW YORK
Banks of England, France and Bel
gium Advance Rates--Amerlca
Able 10 Command Move-
ment of Capital
BY Associated Press.

BY Associated Press.
NEW YORK, Nov. 1.-THE contest OF
the European money markets 10 Retain
their gold resources was Indicated by the
simultaneous action today of three OF
the large central banks of Europe ana
call for a meeting for tomorrow OF the
governing board of fourth Inc Bank
of England advanced its rate Oh as
count from 6 to 7 pen cent, rate Wnlch
has not heretofore been reached since
1873 The Bank of France advanced Its
regular discount rate from 31s per cent to
per cent anu fixed the rate Tor loans
on securities at Az per cent The Nation
al Bank of Belgium advanced It's rate
of discount from 51a per cent to per
cent and DR.. Koch, governor or the I'M
perial Bank of Germany, called q meet
ing of the law governing board Ior To-
morrow, which it is expected Will ad-
vance the discount rate from to per
cent.
These movements in Europe are re-
garded as an indication of the ability OF
New York to command the gold and the
e--orts of the European banks to protect
themselves against this demand
Even the high discount rates, however,
are regarded as insufficient to prevent the
further importation of gold into this
country, in view of the large credits
which are being created by the shipment
of wheat and cotton.
New York already has engaged on the
move gold to the amount of $39, 70,OOO,
and the scant crops in Europe and the
rapid outward movement of American
products threaten to draw more gold
to this country in spite of the protective
measures of the European banks.
Confidence Keynote
The general feeling in financial circles
here today was one Of serenity and con-
fidence in spite of the advances In EURO
mean bank rates. The continuous arriv-
ais of gold, which were swelled by $1,000
600 coming on the Teutonic, are rapidly
replenishing bank reserves and anorolne
the basis for protecting credit. 1t is no.
anticipated that 1t will be necessary te
issue small scrip here as is being done
in other cities, although. wages In many
cases will be paid in checks.
Goldman, Sachs & Co. have announce
the. engagement of $1,650,000 for import
from London. Kuhn, Loeb S Co. also
announced that they had secured $5oo,0o'
in Europe.
THE high rate fixed by the English bank
is not expected to entirely arrest exports
from London to New York, but is counter
upon in London to equalize the dlstrlpu
tion of the yellow metal among european
money centers so as to offset losses u
America by importing gold from otnei
places.
advanced its rate, although to only pei
cent is considered a recognition OF TN
severity of the pressure upon the Dank
great gold resources This action Is O.
speciaI significance. because 1t is the con
sistent policy of the Bank of France u
afford commerce the benefit of low ant
uniform rate of discount and even II
buy gold at a loss unless conditions II
the international money market make /
necessary to protect the reserve.
Declines Expected
The stock market reflected the pres
snre for money by considerable decline
today, but these declines generally wer
expected by bankers, who looked upol
the rapid advance in quotations OF yes
terday as hardly justified by the situa
tion.
The engagement of gold today brough
I'm the total importations on the presen
movement to $40, $4,000, an amount whic
would permit a loan expansion OF NOR
than $50, 900, 900 If the legal reserves ma
not been already impaired. The situation
In regard to the trusts companies is grad
ually becoming normal The commute
of trust company presidents is satlsne
that their assets are ample to meet a
of their obligations, and Will give tnef
oil the aid offered in case demands o.
1hem should continue. Plans for regain
ing their old volume of business are un
der discussion but will require some tim
for definite conclusions
The temporary scarcity of currency
heing met very generally, according !
reuorts reaching New York, by the issu
Of printed certified checks or temporar
interest bearing notes, and in some case
hv scrip issued by manufacturing an
ofher non-banking corporations. Thi
resource was very generally resorted
in 1898 and practically no trouble aros
from any such issues. Most of the scri
issued at that time was payable after
snecified period, as ninety days or 81
,aonths but where issued by the bank
Nth the support of the clearing hous
usually specified that the paper would
received on deposit at the clearing nous
banks.
whether this paper would be subject
tba fax of 10 per cent imposed upon tn
issue of notes to circulate as money b
indiv;duals or institutions other tina
yationaI, banks. The question was settle
h,, Attorney General Olney in an opinio
oS November 21, 1898, that "the tax q
state banks imposed by the act of Eel
ruary 8. 1875, applies only to promissor
notes and not to other negotiable {
ouasi-negotiable paper
The attorney general advised that thr'
of the instruments submitted to him wei
plainly not notes, but checks, and migl
he left out of consideration. The te
case was on a certificate of the clearir
house of Albany, Georgia, which statf
there had been a deposit of securities
double the amount of the obligation
the bank which was responsible for Il
note and that these securities were d
nosited for the payment to the bank
hearer in lawful money of the Unite
states. at six months from date,
earlier. at the option of said bank.
THE attorney general not only laid dow
a rule that such paper was not subject
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