The Aberdeen Democrat. (Aberdeen, South Dakota) 1???-1909, 1907-11-08
BANKS Of EUROPE
RAISE DISCOUNT RATE
FOREIGN FrNANc1ERs ), SEEK TO
STOP FLOOD OF CD TO
UNITED STAT. =
S
Three of the Largest Bank % ncrease
Their Discount Rates ano :. Fourth
Will Take Action Today nix OF
England's Rate Now Sew Per
Cent, Highest Since Panic Of 1893
will Not Stop Shipments.

New York, N. Y, Nov. S.-The
contest of European money markets
to retain their gold resources was
indicated by the simultaneous ac-
ton yesterday of three of the large
central banks of Europe and call
for "a meeting today of the governing
board Of fourth. The Bank of Eng
land advanced it's rate Of discount
from six to seven per cent, rate
which has not before been reached
since 1878. The Bank of France
advanced it's regular discount rate
from three and half per cent to
four per cent and fixed the rate for
loans on securities at four and a
half per cent. The National Bank
of Belgium advanced its rate of dis
count from five and a half per cent
to six per cent and DR.. Koch, gov
ernor of the Imperial Bank of Ger
many, called a meeting of the gov
erning board for today which is ex-
pected to advance the discount rate
of the bank from six to seven per
cent. These movements in Europe
are regarded as an indication of the
ability of New York to command
gold and efforts of European. banks
to protect themselves against this
demand.
Even these high discount rates,
however, are regarded a sinsufficient
to prevent further importation of
gold into this country in view Of
the large credits which are being
created by the shipment of wheat
and cotton. The high rate fixed by
the English bank is not expected to
entirely arrest the export from Lon
don to New York, but is counted on
in London to equalize the distribu-
tion of the yellow metal among the
European money centers, so as to
Offset losses to America by imports
OF gold from other places. The fact
that the Bank of France had ad-
vanced it's rate, although to only four
per cent, is considered recognition
of the severity of the pressure upon
the banks great gold resources. This
action is a special significance, be-
cause it is the consistent policy of
the Bank of France to afford COM
merce the benefit of a low and uni
form rate of discount and even to
buy gold at a loss unless conditions
in the international money market
make it necessary to protect the re-
serve.
The temporary scarcity of cur
rency caused by boarding and the
desire of banks to husband their re-
sources is being met very general
ly, according to the reports reach
ing New York bankers, by the issue
Of printed certified checks or tenn
porary interest bearing notes and in
some cases by scrip issued by manu-.
2 featuring and other non-banking cor
porations.
This resource was very generally
resorted to in the panic of 1893 and
practically no trouble arose from
any such issue. Most of the scrip
issued at that time was payable after
eeiied period, at ninety days or
six months, but were issued by the
banks with the support Of the clear
ing house usually specified that the
paper would be received on deposit
at clearing house banks Some ques-
ton arose at that time as to whether
this paper would be subjected to the
tax of ten per cent imposed upon the
issue of notes to circulate as money
by individuals or institutions other
than national banks. The question
was settled by Attorney General OIL
ney after the panic was practically
over in an opinion Of November 81,
1893. The caption of that opinion
pretty we'll expresses its text that
The tax on state banks imposed By
4 the act of February 5, 1875, chap
ter 35, section 19, applies only to
promissory notes and not to other ne
gotiable quasi negotiable paper