The morning journal-courier., 1907-12-23
Approaching Annual Settle ments Hold Up Operations
 in Securities.
NORMAL CONDITIONS SOON
Discussion of Recent Panic by We'll Informed Financiers Restores
 Confidence.

for the coming annual settlements, and operations in securities were, for the most part, in abeyanee or under some oppression. Transactions in stocks were to a great extent in professional hands and the pressure on the market were not acute in spite of the forti- flying process in progress by the banks. With the premium on currency per sisting in New York, and the outflow of cash to the interior still going on, in spite of the period of the usual re- turn flow of funds which go out to nave 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 8 part of the deficit be- low the legal reserve held and still have 8 large volume of clearing house certificates outstanding, the imperative call to proceed with the work of recup- eration was recognized. The heavy de- mands to be faced for the year-end settlements emphasized this call, The money market was affected in conse- quence, call loan rates ruling higher The time loan market continued almost nominal, the supply of funds in that department being of the scantiest, and there was no effective demand for mer- cantie paper, of which an absorption is relied upon to carry over commercial affairs through approaching maturi- ties of large obligations.
 The week was notable for the import ant contributions in public addresses and official reports from many of the hest informed minds on financial af- fairs to the discussion and elueidation of the causes of the recent crisis and of possible remedies.
 effect has been to broaden the general comprehension of the far reaching underlying conditions which led up to the crisis and to relegate toN their proper position of relatively less importance some of the more violent manifestations in the banking and money operations which were symp- toms rather than active causes. An drew Carnegie's assumption that crises are the outgrowth of inherent ten dencies ln human nature not to be con fined by legislative restrictions was in practical conformity with the views ex- pressed by William Sherer. manager of the New York clearing house, who declared that the great disturbance of capital caused by the war between Jaran and Russia, had been further accentuated by the earthquake and fire loss at San Francisco, while extrava- gant living and the disclosures in the management of corporations had help ell tn bring about alarm and loss of conlifcte The annual report of the contrclie of the currency, William B. Ridglev, offered what some regard as ar Illuminating opinion on the scope of the banking disturbance, which broadened the field of it's causes far beyond the immediate troubles in New York. Says Mir Ridgley;
 e"The conditions which led to the Z 1HJIlC Ol .OCJODCl duQ ANONClllpCls iOVi3 were not due to the lack of confidence of the people in the banks, but more to a lack of confidence of the banks in themselves and their reserves, Banks have been fearful that the re- serve system would break down, and in consequence it has broken down and the reserve deposits have been only partially available"
 By an analysis of the working of the provisions of the banking law which allows deposit of country banking re- serves in reserve cities and of the latter's reserves in central reserve cit ies the controller arrives at the cons clusion that country banks keep but six per cent on hand in cash and of the country banks reserve deposits the city banks keep but onsquarter per cent on hand in cash. He argues therefore, that if there is a reduction in the deposits of the country banks of S150,0OO out of $1O,00O,00O, or only 1h per cent, it calls for more cash or re- serve money than has been kept on hand in the reserve banks for the whole $10900,0O0. The Consequences of this condition are found in the returns of the national banks to the controller of December 3, of which the feature is the portentous withdrawel from cen- tral reserve and reserve cities for heap ing up in the country banks
 Another important contribution to the discussion of measures of corree- tion was found in the exhaustive re- port O. the special commission appoint ed by Governor Hughes to recommend the reform of New York bank and trust company laws, especially in the reserve requirement. upon trust companies en- gagged in banking business, Financial opinion sees with satisfaction a way thus opened for correction of a situa- +ion that constituted the weakest point in the whole chain of the banking world when the strain was put upon it
 .n it's immediate effect upon senti- ment regarding the financial and com mercial outlook this comparative dis cussion and frank expression have served to deepen somewhat, the appre- citation of the extent of the disturb ance, and there has been a correspond- ing growth of anxiety as to the amount of remedial work which must be done to restore conditions to their previous prosperous level.