The Washington herald., 1907-08-25
Financial situation.

Secretary Cortelyou has wisely decided
to initiate at once his new policy OF
making regular and continuous deposits
Of public moneys IN national banks with
view TO relieving the financial strin-
gency now prevailing in the principal
money markets. That stringency is. TO
some extent. due 10 the governments
withdrawal OF its daily receipts OF reve-
nue. from the general monetary supply
and 10 its rapid accumulation OF a Treas
ury surplus for which there is no public
need. This grave defect of our financial
system Mr. COrteiyou proposes to remedy
so far as possible by depositing in na-
tional banks the current customs receipts.
amounting to about 100000 day, to-
gether with such other sums from the
Treasury balances as may seem requisite.
These deposits will be returnable In In
stallments. if needed. after January l
next. Mr. Cortelyou hopes by the new
method OF making constant and regular
deposits to avoid making the Treasury
disturbing factor in the money market,
and to Illustrate the speculative use Of
enormous sums distributed at critical mo-
ments-
In spite of interested efforts TO make it
appear that the corporation policy OF the
administration Is at the bottom Of Wall
streets troubles. the consensus OF balanced
judgment IS that Industrial and CONNER
cial enterprises are suffering more from a
real lack Of available capital than from
regulative legislation. The demand for
capital has run far ahead of the supply
not only in the United States but In all
civilized countries, with a resultant in
crease Of the interest rate and check
TO investment Jacob II. Schiff. the we'll
known banker. expressed this view IN
the interview printed the other day IN
This paper. and the same opinion may be
found in a report issued by the CONNER
cial National Bank Of Chicago based on
inquiries made OF $1,000 correspondents
throughout the West and Southwest
This report says that there is an ex-
traOrdinary demand for funds in all lines
Of business activity, accompanied by firm
interest rates and tight money. but that
the overwhelming preponderance Of evil
dence is that the business situation is
sound and satisfactory" The Chicago
bank anticipates. as does Mr.. Schiff, that
there Will be some slowing down of bust
ness, a tendency TO a slower pace being
noted in many lines, but il aflrms that
the credit situation is sound Mr. Schif
believes that the only remedy for the
present state OF affairs is a temporary
reduction in our activities until the coun-
try's capital and credit facilities again
have reached n point sufficient for its
volume Of business" Such a slowing
down is very far from indicating a ces-
satiOn Of prosperity. It means the sub
stitution Of a sounder foundation OF pros
perity for one that was admittedly dan
gerOus.
The monetary stTingency being the
most conspicuous feature Of the financial
situation, the persistent withdrawal Of
public funds from the channels OF supply
Is an indefensible course. MI CortelyOu's
new policy Will, therefore, be welcomed
by the business community, and doubt
less viii contribute TO encourage the more
hopeful feeling which has arisen in Wall
street since the Presidents Provincetown
address made it clear that the govern
ment corporation programme. though un-
deviating, Is not intended TO be vindic-
tive or destructive.