The San Francisco call., 1907-06-17
BANKS NOT so STRONG

The condition of the New YORK clear
ing house banks, on which the princi-
pal burden of the settlements will fall,
has been declining rather than improv-
ing the surplus reserve of those insti-
tutions now standing at s4,514.625, com
pared with s7,073.375 in this week q
year ago. The compilation of the re-
ports of national banks throughout
the country for May 20 was made up
at Washington last week and revealed
the extended credit position the coun-
try over. Compared with the preced-
ing statement, on March %, loans had
expanded some $95.299,69S, while the
comparison with June Is of last year
showed a growth in the loan item
reaching the formidable total of s424.-
253, ,613 For the eleven months period
the national banks had added but $40
35S,544 to their cash holdings, and of
this amount s35,371.597 had been
secured in the SO days preceding the
statements,
comparison of the changes for so
day items of the New York bank state
ments shows that the clearing house
banks in that time had expanded loans
s14849,100 and cash holding s32, ,752, 800,
accounting for a large portion of the
changes made by the nationalsbanks as
a whole. The inference is plain that
the interior banks were recalling
credits placed in New York for use IT
home while the New York banks were
called upon to replace the loans thus
recalled. The deduction to be drawn is
of restricted facilities available for
meeting the July 1 acquisitions.
WITHDRAW s3o,ooo.oo0
The decision of the secretary of the
treasury to recall s30 000,0 of gov
ernment deposits on July 1 will defer
that operation until after the payment
for redemption of the maturing of the
per cent bonds on June Is, which
the treasury department estimated win
amount to s36.00o, 900. This leaves a
margin of possible benefit to the money
market of se,oo0,0oo when the opera
ton is concluded, but the final delay in
presentation of government bonds for
redemption is expected to postpone the
full effect of the bond redemptions on
the money market. Efforts at re-
cuperation in foreign money markets,
especially in Paris, have placed a bur-
den on the New York money market by
gold Withdrawals and have helped to
deplete the resources of the New York
banks.
The gold export movement was in
terrupted last week, but the sustained
firmness Of foreign exchange led to its
resumption at the end of the week. The
Paris market made payment of
$4,000, 900 during the week for a ship
ment of~New Haven railroad notes.
which helped to keep down the power
of the Paris banks to draw gold from
New York. The position of the Bank OF
France is much weaker than at this
time last year and it's work of recuper-
alton may be extended before the rirst
of July.
The lavish outlay of capital for ex-
tension to take advantage of<the pros
perity of the country is prime factor
in the present shortage of capital. The
possibility of embarrassment for lack
of sufficient working capital to conduct
operations lends itself to supposition.
Rumors of such troubles found ready
and unpleasant credence when applied
to enterprises which were known to
have made large outlays for extension.
The specific formulation of these ru-
mors, however, led to their authorita-
tive refutation.