Los Angeles herald., 1907-12-19
MONEY SITUATION
SHOWS IMPROVEMENT
CLEARING HOUSE CERTIFICATES
SOON CANCELLED
Time Will Be Required to Make Conn
pIete Recovery from the Tres
mendous Losses Suffered
During the Year

sThe monetary situation shows SLOW but sure
improvement. The premium on currency,
symptom of disorder, has not yet entirely dls-
appeared but is declining. 1t is not known
that clearing house certificates have been can
ccled to any important extent but the pros
poets are that this policy will soon be inaugu-
rated. The banks Of New York In their re-
cent statement showed themselves as whole
to be In very good condition, considering the
tremendous burden which has recently been
imposed upon them. With scarcely an eXcep-
tion the clearing house banks have shown
very clear recognition of enlightened self
interest by dipping into their reserves and
loanlng freely in time of distress Their pol
icy has been in very favorable contrast to that
adopted at many other cities. where In some
instances banks openly boasted OF CARRYING re-
serves from 80 to 90 per cent, when the new
York banks were straining every resource 10
help those in trouble. II is unfortunate that so
many institutions glarlngly failed in their con
ception of responsibility and duty in time OF
disaster; especially by the pursuit or such
an ultra-selhsh policy they aggravated rather
than amelioratnd difficulties which must nave
reacted upon themselves or their associates Az
any rate, the banks of New YORK nave passeu
through the crisis very satisfactorily. There
may be some wedding out of unsound or useless
concerns, but there has been no signal disaster
in this panic among the New York banks.
The trust companies situation is the chief
source of perplexity now. During the next two
weeks the strngency in money may be con-
tinued in view of the preparation for January
interest disbursements and settlements Incl
dental to the close of the year. good many
maturities will also have to be extended dur
ing the next few weeks, and this may add 10
the firmness in money but after the mlddle
of January the tendency should again be To-
wards easier conditions. Funds Withdrawn Tor
crop moving purposes will soon begin TO re-
turn from the Interior while money With
crawn by irterior banks during the panic Will
also come back with considerable freedom. The
distribution of January dividend and interest
payments will be helpful, stimulating the IN
vestment demand somewhat and enabling many
individuals to lessen their indebtedness. Last
year these payments amounted to about SlSO,
600, 600; this year they will probably exceed
that figure, owinG to the large issue OF notes
and other securities during 1907. Some de-
creases in dividends have been announced and
more may follow but these are not likely to
prove sufficient to Offset increased payments In
other directions
The speculative situation is conflicting. Our
panic is unquestionably over, but the after
effects are still with us. Time is required to
complete readjustment to the new conditions,
as well as to enable recovery from the tre-
nendous losses suffered during the year The
undertone is certainly towards Improvement,
but prolonged advances are prevented by an
eager disposition to take profits, and by the
fact that each high level when reached Is apt
TO invite fresh liquidation in quarters where
assistance was rendered during the late panic.
such conditions cause periodic short selling;
hence, we find greater division OF opinion ON
the market and stronger bear party than has
been seen for years. The bears, however, lack
leadership and are not very aggressivei for II
is appreciated that security values have had a
tremendous shrinkage and that in the absence
OF further disaster are more likely 10 recover
than to shrink. In many respects the situa-
ton is really better than a year ago, because
the worst is known and the future Is chiefly
matter of recognition of -and adjustment to
changed conditions.