Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1907-11-11
FINANCIAL Situation Clears Rapidly
During the Week.
BANKS IN BETTER SHAPE
Arrivals and Engagements Of Gold
Help Out Reserves.
MORE CASH FROM EUROPE
Big Balance of Trade Must Be Paid
in Gold Coin.
COTTON MOVEMENT CONeEsTEp
Secretary of Treasury and New YOrS
Banks sending as Much Ala to
Southern Points as Possible
Few Bank Failures.

I
NEW YORK, Nov. io-The most event
ful week in the financial history Of the
present generation came to a close on
Saturday. with conditions much clearer
than week before. but with some clouds
still hanging over the financial horizon
The previous week had closed with the
disquietlng announcement that the New
York bank reserves had lost $2O,OO0OOO cash
despite the deposits by the government dur
ing the week Of nearly an equal sum-
causing a net cash loss OF S60O0O0OO
The bank statement OF yesterday changes
this situation. While II shows a nominal
decrease In required reserves OF $l3,GS5. SEQ
more than two-thlrds OF this decrease is
due to the reserve requirements caused by
increase in deposits because OF the taking
over of loans from the trust companies
by the banks. Moreover, the actual cash
loss of $4,3l&000 Is due to the system OF
averaging accounts for the entire week. in
Guiding several before the arrival OF the
new gold. Unless demands from the coun-
try are heavy next week the arrivals OF
additional gold will more than offset the
loss of cash last week and make credit
able showing for reserves on Saturday next.
support for Trust Companies.
ing Of grave doubt as to the future OF the
two trust compsnies which had been sub
jeoted to severe runs. The possibility that
they might so down and drag with them
much of the financial structure which still
stood erect, kept Mr., Morgan, the trust
company presidents and other financial
leaders in almost continuous session until
late Sunday morning and again on
Wednesday, until 3 o'clock in the morning
When IL was finally announced early on
Wednesday forenoon by President King OF
the Lincoln Trust company acting as
chairman OF the committee of trust COM
nany presidents that the management OF
the Trust Company of America and the
Lincoln Trust company were to receive all
the assistance they requn ed in return for
deposiung the majority OF their stock in
the Ranos Of the committee, the situation
cleared a large degree of confidence re-
turned and rna stock Market auvahl,ea gem
eraiiy from 10 points. Al was telt t4at
the danger of a general crash in New
ORR was over and that the surging waves
of the storm would gradually suUside.
Foreign Rates Raised.
The restoIaLlvn OI cUmpatauivs security
in New YORK. was obtained only by demands
upon money markets of europe, wnicn
since the Boer war. Indeed the Bank OF
England, in order TO protect its gold re-
serves raised ITS discount rate on Thurs
day TO per cent, a rate whch had not
been before exceeded since 1893 The Bank
of France raised its rates Ior discounts to
per cent, The Bank of Belgium to por
cent, and the Bank of Germany, at a spe-
cial meeting called on Friday, fixed tho
unusual rate OF ~ per cent. 1t is not sur
prising that these precautions were taAen
to protect European bank reserves, in view
OF the fact that nearly S5O.00,0O0 In gold was
engaged by American banking institutions
within less than two weeks The first arrival
OF the yellow metal came at the critical
moment when the trust company situation
was uncertain on Tuesday Then came
smaller consignments on Wednesday, and
on Friday the delivery of S123 ,00O by the
Lusitania. The demand for gold from
Europe came at a favorable time I'm some
respects. for the outward movement OF
American products, of which the leading
ones are cotton and wheat. The. fact that
European bankers declined during the sum-
meT to accept American finance bills, be-
cause they already scented the storm. made
the demand upon them more sudden than
would have been the case IL American
present time to buy cotton and grain bills
to cover previous borrowings. Under the
actual conditions Europe must pay. sub
stantially IN gold, for the balance Of ex-
ported products which is being created in
favor Of this country by every bale of cot
ton and carload OF wheat placed on ship
board for export.
Cotton Movement COnEested.
The cotton movement has peen 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 treasury and New York bankers tO
aid the southern banks In meeting the stu-
alton. The same is true In regard 10 the
movement of grain, which has thus far
been more easily handled at Duluth and
other northwest points with the aid OF
western banks than has the cotton move
ment
New York bankers are sending forward
to the west and south all the currency they
can spare. especially to those points where
in their judgment 1t is most needed. The
premium on currency, which rose as high
as per cent during the week, though Il
closed somewhat lower. has had a curious
effect on exchange and the price OF United
states bonds II has disturbed the calcu-
latious based upon gold PARTIES OF ex-
change, and has made II possible 20 pay a
higher price TO get gold and 10 acquire
bonds as a basis for circulation than II no
such premium prevailed.
One Of the favorable features Of the sit
nation thus far Is the relatively sman num-
Der OF failures Of national banks, az conf
pared with the record Of 1893 Al that time
seventy eight national banks suspended In
he single month Of July and Sixty-three
additional in June and August. while dur
ng the hrst eight months Of 1898 the num-
Der OF suspensions OF state and private
BANKS was ii6 In the present crisis the
number OF national bank suspensions re-
ported does not exceed a dozen and some
II these will reopen. The week closed with
favorable commercial situation. a. in.
iicated by the reports 20 II. a. Dun a Co.
Tho new week opens with the banking
situation In New York cleared up 50 far
as any danger Of further failures or sus-
pensions ts concerned with the banking
.eserves comparatively intact. and with
more than tSOO0.OOO on the ocean 70
strengthen them during the coming wees.