The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1907-12-09
GRADUAL RETURN
OF CONF ENCE
Restoration of Normal Condi-
lions Disclosed by Reports
of National Banks.
TOO MUCH MONEY FEARED
CURRENCY LEGISLATION NOT
EXPECTED I'M NEW YORK.

EXPECTED IN NEW YORK.
New York, Dec. S.-The events of the
past week in the financial world have
been such as usually mark the gradual
return of confidence and the restora-
ton of normal conditions in the banks
The decision of the secretary of the
treasury to issue only about $40 200, 600
of the 5000. 900 in new securities,
which he expressed a willingness to is
sue If conditions required, the disclos-
ure of unusually strong reserves by
country banks reporting to the comp
troller of the currency, the decline in
the currency premium and the i'm
provement in the New York bank
statement have all been features of the
week which have tended towards sta
bility and reinsurance. The action of
the secretary of the treasury in limit
ing the issues Of securities. was a part
of the original plan recommended to
him to meet the situation by a resOiute
and adequate measure. but to carry the
execution of the measure no further
than circumstances required. The re-
suit of limiting the issue of the Pan
anna two per cent bonds TO SIS, 000, 900
and the one-year treasury certificates
to about $4,000, 900 will be to consid-
erably simplify the problem of the
treasury management and money mar
ket conditions during the spring. 1t
is anticipated by far-sighted banks
here that there will be a plethora of
money soon, instead of a dearth. and
that it will be necessary to reduce in
some way the large volume of cur
which IN haau hrnuo nj n
use during the crisis.
Increased Circulation.
The increase in money in circulation
outside the treasury. as shown by the
monthly statement of the treasury de-
partment for November was S131, S72,-
SS7. OF this amount the increase in
gold in the country is computed at
about s72,O00,000. including domestic
production as well as importation from
abroad. The other principal form of
increase is in bank circulation, in
which an increase of S7,533,521 was OBJ
tanned by the disbursement of bank
notes held in the treasury cash, and
SAC, 237, 100 was obtained by actual in
crease in the notes issued by the
comptroller and outstanding. There
have been fears in some quarters that
If anything apprOximating 500, 600 600
in new bank notes were issued upon
the securities of the new One-year GER
tificates the resulting initiation would
expel gold in large amounts after the
credits established by the crop move
ment were exhausted. This danger
will be reduced to minimum 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 called attention in
announcing the new loans.
Gold in the Country.
The total gold in the country report
ed by the last treasury statement, is
81, SCI, 7l4,719. which is equal to more
than 80 per cent of the total money in
circulation. Some further increase in
bank circulation is expected here upon
the Panama bonds and the treasury
certificates, but IL is believed that the
bonds will be deposited in many cases
as security for the public money which
has been left with the banks, and will
not be employed as a basis for circula-
ton until the one-year certificates are
Cancelled in the spring, when money to
be withdrawn from the banks by the
treasury lOE NHt IEQ6IllDllOl OF the GER
tifiCates will release bonds and the bal
ter can then be substituted for the GER
tificates as security for circulation. 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 ii
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 re-
duce the cost of the one-year certifi-
Gates to about $500 900. This estimate
is based upon the cancellation of S10.-
0OO. 900 in the certificates in six months.
which will make the interest paid only
one and a half per cent, while the full
interest of 3 per cent is paid on the re-
naming amount of $5,0OO,000.
Large Reserves in Banks.
The reports of the condition of the
national banks or Dec. 8, which are be-
ing published I'm various localities, and
are gradually reaching the comptroller
of the currency, are verifying the an
ticipation of the leading bankers, set
forth by the Associated Press a week
ago, that large reserves would be dis
closed in the interior banks, that the
disclosures would tend to restore con-
fidence and that the banks would be
willing to release such excess reserves
after making their statements. A rough
calculation of the reports. of the Chi
cagO banks, including some state
banks. indicates reserves of nearly 81
per cent. About the same proportion
is reported from New Orleans, and still
higher reserves at smaller places, where
the law requires 10 per cent, including
deposits in reserve cities. The fact that
two failures of national banks of a GER
tain degree of Importance have oc-
CURED during the week without appar-
emily causing any shock to confidence
even i'm their own localities, and still
less in the financial centers, is regard
ed here as another favorable indication
of the state of the financial markets.
The increase of s4,S71,000 in actual
cash in the New York clearing house
banks is regarded here as one of the
symptoms that the currency crisis as
en,ch is practically over. The reduction
Of loans by about s11, 800, 900 is also con-
sidered a favorable indication OF dimln-
ishing pressure The increase in the
required reserve by S6,l79,0OO reduces
the deficit in New York reserves to
sac. PIC. 600, and part of this will be COW
cred by gold yet to arrive.
Legislation Not Expected.
Not much is expected among New
York bankers in the way of currency
legislation by congress at the present
session. The fact that the presidential
election is approaching and that there
is wide diversity of view as TO the