New-York tribune., 1907-11-03
BIG DROP In RESERVE.
A MOMENTARY ANXIETY.
BGnk Statement, HOzCeUer, Is Too
Late to affect Market.

MOmentary apprehension caused yester-
day by the showing made by the weekly bank
statement of a record breaking decrease in re-
serve and the largest increase in loans ever re-
corded in single week. AS. however. the state
ment did not appear until the close OF business
the Stock Exchange, ii was without in1u-
ence in yesterdays market and later explana-
tions of the reasons for the extraordinary changes
went far toward removing the bad impression
produced by the first inspection OF the figures
of the important item. William A. Nash. prest-
dent of the Corn Exchange Bank and member
of the Clearing House committee. said yester-
day afternoon:
While I was in favor OF the publication OF the
totals of the bank statement. we have always
done In the past under all circumstances. can
see now that the situation IS so dlnerent 1rOm
any that has existed before that the figures are
likely TO be misunderstood We have during
the week been taking over the loans called oy
the trust cOmpanies-that process has increased
the bank loans.
The trust companies have increased their de-
pOsits i'm the banks. The total deposits have
thus been increased without any addition TO the
stock of cash, and naturally the percentage Oh
reserve has fallen l do not regard this as sig
nificant, because the increase of deposits by the
trust companies is payable, not in cash, but IN
Clearing House funds.
The changes in loans deposits and reserve are
so much in the nature of bookkeeping that they
should not affect the present situation. The
real matter In the bank statement is the supply
of cash The losses during the week are not
greater than I expected. The shipments to the
interior and the boarding OF currency account
for the loss reported
believe that from now on there will be an
Improvement. The boarded currency Will re-
spond. as it always has. to the tempting pre-
MUM being offered The gold on the way rroTn
Europe viii begin to flow in next week. and
with it will come falling off in the excitement
about cash. The banking situation is essentially
sound. and soivenCy being assured, the course
of business should soon flow in the usual chan
nels- This was the course of things in 1888. and
we are much richer than we were then In
brief, this disturbance, compared with the vast
volume of wealth, is but superficial One-an-
noying, of course, but not in my judgment suf1-
cient to cause either distrust or alarm
CONFERENCE WITH MIR. MORGAN.
There was a conference all day yesterday
among about fifteen prominent bankers in this
city at the home of J. Pierpont Morgan Among
those present, several OF whom are presidents
of banks and trust companies in this city, were
George w Perkins James Stllman, A b EIepz
burn, Charles Steele. Grant B. SchIey. Isaac n.
Selisman and George F. Baker
The conference began shortly after O'Clock
in the slorning. and at noon all of those present
walked in a body 10 the Waldorf-Astoria Hotel
where luncheon was served a little after
O'Clock Mr. Morgan left his house and entered
his carriage. II was rumored that he was going
to Washington. but later IL said by one OF
those who attended the conference that Mr..
Morgan would remain in the city during the
night and all day to-day.
When the other inanciers left Mr.. Morgan's
house all refused to discuss what had been
talked about at the conference. Mr.. Perkins
went directly from the house to the Manhattan
Hotel. When seen he said: There will be no
formal statement issued concerning this con-
ference tonight. In fact there will be no
statement at all"
II was reported that the bankers had discussed
plans TO ease the market far as the neses-
sity for currency and notes of small denomina-
tion was concerned
There was a report that the conference had
before it a long letter from the Secretary Of
the Treasury setting forth just how far the
government would go 10 add 10 it's support al
ready given.
Yesterdays bank statement showed an in
crease in loans. as compared with the previous
weeks statement. of s6O.741.6OO; an Increase in
deposits of S2S,O14.sOO. and a decrease in re-
serve of $2O.6O1.SO0, the latter figures being
made up OF $1OOS9. 200 decrease in legal tenders
and S20512,1OO decrease in specie
In consequence of the increase in deposits. the
required reserve increased S7.OO3.T25. so thar
the deficit. increased by the amount Z the de-
crease in actual reserve. plus the increased re-
serve required. a total OF S31. Sos. .52J, the
deficit now standing at S3SS5S S25 which COM
pares with last weeks deficit of 81. .253. 800 and
with a surplus reserve Of S3,O49T75 at this time
last year and surplus of S2.S54,2I5 two years
ago. The largest deficit in reserve in the panic
of 1893 was S16545 300 shown in the statement
for August l. Of that year. but the percentage
of reserve to deposits shown in that statement.
2O55. was not as large as the percentage shown
Yesterday which was 213. In the weeks follow
ing the August Il statement in 1893 the deficit
steadily decreased and was soon transformed
into a surplus. The statement of August 10
showed deficit of $12,O45.SOO; August %.
So. .73T SO; September . $1.567.525: September Q.
surplus So 96637 and September 10. surplus
S1O6O1, 700
OTHER EXPLANATION