Deseret evening news. [volume] (Great Salt Lake City [Utah]) 1867-1920, 1907-12-02
Return OF Confidence viii Brinq a
Condition Of Actual Redun-
danoy in Money Market.
GREAT ABUNDANCE OF GOLD.
Return Flow h. Sure 90 Have an Tn
favorable Eject ON Financial
Sentiment.

New York. Dec. LIT i8 significant
Of the change in financial opinion that
most OF the discussion among auan-
cial men last week dealt with the
dreaded effect Of state OF imitation of
the currency, into which 70 was feared
the country might emerge with tho
passing of tho effects of irrational dis
trust The bringing forward Of this
subject into debate while the premium
on currency was stiu being paid and
other active measures for relief Of the
| currency famine being pursued. was
due 60 tho plain lesson OF experience In
! past crises Of similar kind, In all
| or those the first return of confidence
ana the rc-establishment OF credit have
/ brought condition OF actual redun-
! uancy of the money market. a heavy
! accumulation OF banking reserves and
| "a free export movement Of gold
While the enormous mass of gold
that has flowed TO the United Suites IN
response 70 the urgent requirements
developed By the crisis is admittedly
! IN excess OF the normal requirements
OF the coming period the return now
| Of gold Is bound 20 have an unfavor-
I able yftcct on financial sentiment. and
in The event Of its undue stimulation by
amy Imitation of paper note issues
which would tend to force out gold. the
danger OF check being administered
90 the recovery in commercial activity
is taken anxious account Of The de-
cision Of the United States treasury
department TO limit the allotmeuts OF
per cent treasury notes and 10 accept
no more bids for them was the out
| come or this new phase Of the situa-
tion which the turn toward normal
| conditions has developed. The opinion
of the treasury department that the
secretary may call Ia these certih-
Gates before their one-ycar period has
expired and so provide for the imme-
diate retirement of an bank notes Is
sued against them, offers another re-
source for contraction I'm the event Of
any symptom Of imitation.
In another direction 30 is hoped to
find permanent and substantial en-
pl0ymeut for "a large amount OF gold
that has been rushed 10 the United
States. The commission appointed by
Gov. Hughes TO consider changes in
the New York state banking laws is
onioincd to report conclusions by the
18th Of December. While the exact
terms 10 be expected OF tho recon-
mendatiOns Of this committee cannot
be forscen. IL rs taken for granted that
they viii include drastic reform in
the requirements upon the trust COM
panies for holding cash reserves, The
recent crisis has demonstrated the In
adequacy Of present reserve require
meuts for trust companies doing an ar
tive banking businesses which most of
them DO. The 3 per cent Of cash TO
be held iu their own vaults. under the
present law therefore, IS likely % be
changed to- a substantially higher fig
urc. some advocates faYorlng the full
% per cent now eXacted of members Of
the clearing house. II is pointed out
also that more favorable moment for
edoctinE this reform could hardly be
chosen than the period now believed
TO be approaching, when the heavy in
flow of foreign gold VIII be found SUI
perfluous for the diminished needs Of
the circulation and win tend 10 flow
out again.
The engagement Of nearly Sl00. 600 900
Of gold for import, Of which approXi-
mately 100000 900 has been received,
the deposit with the national banks
of about S67 900. 600 Of go kSnmeut
funds and the issue OF new bank notes
10 the amount Of about 100000 900 have
met the present requirements and
opened the way 10 the resumption OF
cash payments by the banks now
clearly at hand. The disappearance of
the premium ON currency. which by
alternative statement OF terms is dis
count on bank checks, viii herald the
restoration 10 use Of many instru-
ments Of credit which share IN some of
the functions as money and Of which
the driving ont Of use forced the ex-
Tho re-establishment OF credit is exc
pected to lead 20 "a prompt resumption
Of exchange operations between the DIFF
ferent money centers in this country,
the dislocation OF which has formed
the most serious embarrassment 60 the
conduct OF commercial operations. The
check which the embarrassments have
caused 20 business. so far as they are
themselves concerned, VIII be removed
at am early day and 10 that extent
leave the way open for prompt re-
cnvery. There remains the question
OF the resumption Of various forms OF
activity which We're absorbing large
amounts Of capital before the crisis
developed and the distrust N which
was the vital impelling cause Of the
crisis. Many such enterprises take on
AN appearance from the present point
Of view. OF extrayagance and lack Of
adjustment % possitA expectations.
The course of events must be awaited
10 define how Ear capital was unprott-
ably sunk in such enterprises, before
tbe march of progress Is taken up
again where IT was halted