The Montgomery advertiser., 1907-12-23
FINANCIAL REVIEW.

markets last week were largely con- cerned with the preparations for the coming annual settlements and opera tions in securities, were, for the most part. in abeyance or under some op- precision.
 Transactions in stocks were to . great extent in professional hands and the pressure on the market was not acute. in spite of the fortifying process in progress by the banks. With the premium on currency persisting in New York and the outflow of cash to the interior still going on. in spite of the period of the usual return flow of funds which go out to move the crops. the conviction was borne home to bankers that the return of normal banking conditions was not to be looked for before the turn of the year. Since the clearing house banks have made up but part of the deficit be- low the legal reserve held and still have a large volume of clearing house certificates outstanding, the imperative call to proceed with the work of re- corporations was recognized.
 The heavy demands to be faced for the year end settlements emphasized this call. The money market was ar fected in consequence. call loan rates ruling higher. The time loan mark ct continued almost nominal the supply of funds in that department being or the scantiest and there was no enective demand for mercantile paper of which an absorption is relied upon to carry over commercial affairs through ap- preaching maturities of large obiisa- tions.
 The week was notable for the impor- tant contributions In public addresses and official reports from many or the best informed minds on financial af- fairs to the decision and eiucfdation of the causes of the recent crisis ana of possible remedies. The erect mas been a broadening of the general com prehension of the far reaching underiy- Ing conditions which led up to the crisis and to relegate to their proper position of relatively less importance some of the more violent manifesta- tions in the banking and money oper- ations which were symptoms rather than active melting causes.
 Andrew carnegie's assumption snas commercial crises are the outgrowth or inherent tendencies in human nature not to be confined by legislative re- strictions was in practical conformity With the views expressed by William Sherrer, manager of the New fork Clearing House, who declared that the great disturbance of capital caused py the war between Japan and hussia' had been accentuated by the earth quake and fire loss at San Francisco, while extravagant living and the dis closures ire the management of corpor- atfons had helped to bring about alarm and loss of confidence. The annual re- port of the comptroller of the curren. cy. William B. Ridgely. offered what some regard as an hluminauns Op.1n rsl on the scope of thei banking disturb ance which broadened the field of US causes far beyond the immediate trou- bies in New York. MT. Ridgely says
 ..The conditions which lead to the manic Of october and November lso1
 were not due to the lack Of confluence
 of the people in the banks, but more
 to a lack of confidence of the banks
 In themselves and their reserve sys-
 have been fearful that the reserve sys- fen, would break down. In conse- auence it has broken down and the re- serve deposits have been only partially
 available" By an analysis of the working pro- visions of the banking law which ai- iowa deposit of country banking re- serves in reserve cities and of the lat ter's reserves in Central Reserve citiss' the controller arrives at the conclusion that country banks keep but SIX per cent on hand cash and of the country hanks reserve deposits the city banks keep but one-fourth per cent on hand in cash. He argues. therefore that 1T there is a reduction in the desposits of the country banks of $t5o.o0o out of
 SIG, ,00O, 900 or only one half per cent it calls for more cash or reserve money than has been kept on hand in the re- serve banks for the whole $10,000.000. The consequences of this condition are found in the returns of the National hanks of the controller of December 9. of which the feature is the porten- tous withdrawal from central reserve and reserve cities for heaptng up in the country banks.
 Another important contribution 70 the discussion of measures for corree- ton was found in the exhaustive re- hort of the special commission ap- pointed by Governor Hughes To re- | commend the reform of New York Rank and Trust Company laws, especia- Iy in the reserve requirement upon trust companies engaged in banking
 business. Financial operation sees
 with satisfaction a way thus opened for correction of situation that con stituted the weakest point in the whole chain of the banking world when the strain was put upon it.
 In it's immediate effects on sentiment
 reea rdinE the financial and commer- cial outlook, this comprehensive de- oision and frank expression have served to deepen somewhat the ap- nreciation of the extent of the distur- ba nee and there has been a correspond ing growth of anxiety as to the amount | nf remedial work which must be done to restore conditions to their previous prosperous level