Los Angeles herald., 1907-12-09

OF WEEK ARE
REASSURNG
REPORTS SHOW LARGE RE-
SERVES
TOTAL GOLD is so PER CENT OF
CIRCULATION
Limiting Issues Of Securities and
Improvement in New York Bank
Statement Aid Restoration
of Confidence
BY Associated Press.

return OF confidence and the restoration
of normal conditions in the banks. The
decision of the secretary of the treasury
to issue only about $4O,OOOOOO of the $780,
900 900 in new securities which he ex-
pressed willingness to issue If condi.
tions required; the disclosure of unusu-
ally strong reserves by country banks re-
porting to the comptroller of the cur
rency, the decline in the currency premi-
UNI, and the improvement in the New
York bank statement, have all been fea-
lures of the week which have tended
toward stability and reinsurance.
The action of the secretary of the treas
ury in limiting the issues Of securities
was a part of the original plan recon-
mended to him to meet the situation by a
resolute and adequate measure, but to
carry the execution of the measure no
further than circumstances required The
result of the limiting of the issue of the
Panama per cent bonds to SIS, 900 and
the one-year treasury certificates to about
SIS, 600 900 will be to considerably simplify
the problem of the treasury management,
and money market conditions during the
spring.
Plethora Expected
1t is anticipated by far-sighted bankers
here that there will be a plethora OF
money soon instead of dearth, and that
it will be necessary to reduce in some
way the large volume of currency which
has been brought into use during the
crisis.
The increase in money in circulation
outside the treasury, as shown by the
monthly statement of the treasury de-
partment for November, was $131, ,S72, ,SS7.
OF this amount the increase in gold in
the country is computed at about $72,OOO,-
O00 including domestic production as well
as lmportations from abroad. The other
principal form of increase is In bank cir
culation, in which an increase OF $7bS5,-
521 was obtained by the disbursement OF
bank notes held in the treasury cash, ana
SAG, ,237, ,730 was obtained by actual increase
in the notes issued by the comptroner
and outstanding.
There have been fears in some quarters
that if anything approximating $1OO,OOO,OOo
in new bank notes were issued upon the
securities of the new one-year certih.
Gates, the resulting imitation would expel
gold in large amounts after the credits
established by the crop movement were
exhausted.
mum by the relatively small issues made
by the treasury, and>if small amounts
in gold should be exported it Is felt that
they could be spared, in view. OF the large
gold resources In the country to which
President Roosevelt calleu attention In
announcing the new loans.
Look for Increase
The total gold in the country reported
by the last treasury statement is $751;
714n9, which is equal TO more than so
per cent of the total money in circula-
ton Some further increase in bank cir
culation is expected here upon the Pana-
ma bonds and the treasury certificates,
but it is believed the bonds Will be de-
posted in many cases as security for the
public money which has been left with
the banks, and will not be employed as
basis for circulation until the one-year
certificates are cancelled in the spring,
when money to be withdrawn from the
banks by the treasury for the redemption
of the certificates will release the bonds,
and the latter can then be substituted
for the certificates as security for circu-
lation. If this proves to be the case. the
increase in bank circulation will not be
very great during the next few months,
and may even turn downward as soon as
it becomes apparent that the banks have
a large accumulation of cash for which
there is little demand.
The curtailment of the issues by the
government will reduce the cost OF the
one-year certificates to about $300,OOO-
This estimate is based upon the cancel
lation of $1O,00O,0OO of the certificates in
six months, which will make the inter-
est paid only III per cent, while the full
interest of per cent is paid on the re-
naming $5,0O0.0OO.
Reserves Are Large
The reports of the condition Of the ma
tional banks on December 8, which are
being published in various localities, and
are gradually reaching the comptroller
of the currency, are verifying the antici-
patton of the leading bankers that large
reserves would be disclosed in the in
terror banks, that the disclosures would
tend to restore confidence and that the
banks would be willing to release such
excess reserves after making their state
ments. A rough calculation of the re-
ports of the Chicago banks, including
some state banks, indicates reserves of
nearly 35 per cent. About the same pro-
portion is reported from New Orleans,
and still higher reserves at smaller places,
where the law requires 10 per cent.
The fact that two failures of national
banks of a certain degree of importance
have occurred during the week without
apparently causing any shock to conf
dence, even in their own localities. and
still less in the financial centers, is re-
garded here as another favorable indica
ton of the financial markets.
The, increase of $4,671, 900 in actual cash
in the New York clearing house banks is
regarded here as one of the symptoms
that the currency crisis, as such, is prac-
ticaily over, The reduction of loans by
about $11, 100000, is also considered a
favorable indication of diminishing pres
sure. y
The increase in the required reserve by
SC, ,779, 900 reduces the deficit in New York
reserves to s46, 100000, and part of this
will be covered by gold yet to arrive.
Legislation Not Looked For
Not much is expected among New York
bankers in the way of currency legisla-
ton by congress at the present session.
The fact that the presidential election is
approaching and that there is wide diver
sity of view as to the proper form of new
legislation, leads to the belief that the
subject will be only considered without
final action during this session.
u1t.o ,,ooaocstxy nf Soma iTnO0rfa n t1f Vnoa O.