The Montgomery advertiser., 1907-11-11
CONDITIONS ARE CLEARING Eventful Week in Finan-
 cial History. SATURDAYS BANK STATEMENT Some Clouds Still Hanging Over
 Financial Horizon. Restoration of Security in New York was Obtained only by Demands Upon European Money
 Markets.
 

New York. Nov. l0--The most event ful week in the financial history of the present generation. came to close on Saturday with conditions much clearer than week before. but with some clouds still hanging over the financial horizon.
 the disquieting announcement that the New York reserves had lost sso.ooo,oo0 in cash, in spite of deposits by the gov srnment during the week of nearly equal sum. representing net cash loss of sso.ooo.ooo.
 changes this situation. While 1t shows a nominal decrease in required re- serves of s1s.os5.so0. more than two- thirds Of this decrease is due to the reserve requirements caused by in- crease in deposits because of the talk ing over of loans rom tho trust com panies by the banks. Moreover, the actual cash loss of S4,3l3. 900 Is due to fhe system of averaging accounts for the entire week, including several days before the arrival of the new gold. Un- less demands from the country are very heavy next week. the arrival of additional gold will more than offset Cue loss of cash last week and make a
 .,iitable showing for reserves on Sat-
 gay next.
 rhe week began on Monday with a feeling of grave doubt as to the fu- ture Of the two trust companies which had been subjected to severe runs. The possibility that they might go down and drag with them much of the finan- cial structure which still stood erect, kept Mir. Morgan, the trust company pregidents and other financial leaders, in almost continuous session until late Sunday niornfng. and again on Wednes- day. until 3 o'clock fin the morning When if was finally announced early on NedpeEt.sY forenoon by President I9inlg of rhe Uuion Trust Company acting as committee of the trust presidents. that the management of the Trust company Of America and the Lincoln Trust Company we're to re- ceive all the assistance they required in return for the depositing of the ma jority of the stock in the hands of the committees, the situation cleared; large degree of confidence returned and the stock market advanced gener- ally from two to three points. It was felt that the danger of general crash in New York was over and that the surging waves of the storm would
 Restoration of Security.
 The restoration of comparative security in New York was obtained only by demands upon the money mar kets of Europe which created ten sion not before experienced since the Boar War. Indeed, the Bank of Eng land. in order to protect It's gold re- sources. raised it's. discount rate on Thursday to seven per tcent. rate which had not before been fixed since 1873 Tho Bank of France raised its rate for discounts to four per cent. the Bank of Belgium to six per cent and the Bank of Germany at a special meeting called on Friday, fixed the un- usual rate ot seven and one-half per cent It is not surprising that these precautions were taken to protect European bank reserves. in view of the fact that nearly $5o,00o,o0 in gold was engaged by American banking insti- tutions within less than two weeks. The first arrival of the yellow metal came ar the critical moment when the trust company situation was uncertain on Tuesday. Then came smaller con- signments on Wednesday, and on Fri day, the delivery of $1O,361,00O by the Lusitania.
 The demand for gold from Europe came at a favorable time in some respects. because of the outward move ment of American products of which the leading ones are cotton and wheat. The fact that European bankers de- clined during the summer to accept American finance bills because they already scented the storm, made the demand upon them more sudden than would have been the case If the Amert- can bankers had found 1t necessary at the present time to buy cotton and grain bills to cover previous borrow Ines. Under the actual conditions | Europe must pay substantially in gold l for the balance ot exported products. | which is being created in favor of this i country by every bale of cotton and | carload of wheat placed on shipboard l for export
 Movement of Crops.
 The cotton movement has been a good deal congested by the absence of | small bills in the Southern banks. but | everything possible is being done by | the Secretary of the Traaury and New York bankers to aid the Southern l banks in meeting the situation. The | same is true in regard to the movement | of grain winch has thus far been more | easily handled at Duluth and other Northwestern points with the aid of
  movement.
 New Workers are sending forward to the West and South all the curren- cy they can spare. especially to those points where in their judgment 1t is most needed The premium on curren- cy which rose as high as per cent during the week. though 1t closed somewhat lower. has had a curious ef- feet upon exchange and the price of United States bonds. It has disturbed the calculations based upon gold par ties of the exchange and has made it possible to pay a higher price to get gold and to acquire bonds as a basis fos circulation than if no such premium prevailed.
 One of the favorable phases of the situation thus far is the relatively small number of failures of national banks as compared with the record of 1883 At that time seventy eight national banks suspended in the single month of July. and siXty-three addi- tional in June. and August, while dur ing the first eight months of 1903, the | number of suspensions of State and |
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