Omaha daily bee., 1907-11-04
Gold on the Way from Europe is Hav-
ing Stesdying Influence,
INCREASE IN BANK NOTES HELPS
Me.-ures Taken to Guard Against a
Recurrence Of Trouble.
TRUST COMPANY RESTRICTIONS
CFini-2 They should Go out OF the
Thanking Business or Keep the
Same Reserve ~ the
HANKS.

-
,,E1, YORK Nov. s.--Last woek was
given over to the work OF rehabilitation
OF financial conditions and much progress
was made, although there remained many
elements of disorder IN the situation owing
to the 'disocation Of exchange facilities
In the money and commercial markets
Thi1 was inevitable from the shock of
the preceding weeks events in New yotk
But the situation has been grell In hGnd
and success was met in limiting the Hange
of the disturbance and in the initiation
OF measures 20 insure correction and set
tlcment OF these the most vital was
the largo amount OF gold secured from
foreign countries for importation now afioat
towards New York. The gold engagements
have reached tine neighborhood OF SSO,OOO,0O0
and this week this broad stream will flow
into New York banks. The feeling that
this supply was enroute has done much
to fortify confidence. but the actual re-
vlving effect on banking and money opera
tlons waits the arrival of the gold. Mean
-imo, the example set by New York in the
adoption Of clearing house certificates for
the payment of balances between the
banks has been followed by the great
money centers and has safeguarded the
banks.
Further important relief is looked for
rom the facilities extended by the comp
roller OF the currency for the increased
bank note circulation. The government
bonds are made available as security to
AXE out additional bank notes and this
will afford largely increased resources for
supplying the urgent requirements for cur
rency, which forms one OF the severest
trials Of the situation.
LeRislatiOn IL Discussed.
Tho conditions which have had to be
met in the recent crisis have given a strong
impetus to the movement for providing
Increased currency and is expected TO in
duce early action by congress 10 authorize
new forms of bank note Issues The ex-
perience OF the country in period of high
prosperity, and active business and industry
and with the banking. position sound and
solvent in coming almost TO 4 deadlock for
lack of means 20 make banking resources
quickly availablee for the needs OF the cir
culation has made q deep impression in In
culcating the needs OF emergency cir
culation which can expand quickly In time
OF need
In another direction, It is practically GER
tain that measures of correction will be
adopted for the trust companies position in
New York, which is now seen 60 have
proved the weak link IN the financial chain.
Here again the solvency of institutions did
not avail to meet the sudden demands OF
depositors without recourse to the banks
for assistance the assistance thus rem
dered proving the strain that precipitated
the crisis. The clearing house banks for
several years have voiced their discomfort
with the trust companies position, which
was due to the great growth OF these insti-
t,,4tn nj fba{r 10
banking functions in the acceptance OF
large deposits subject TO check and TO pay
ment on demand without obligations to
maintain cash reserves in the proportion
enforced on the banks. Efforts OF banks
to coerce the trust companies IN this regard
led to the withdrawal. several years ago. OF
most of the trust companies from the priv
ilege OF clearing through the banks. Under
the operation of last years New York state
law the trust companies had been Obliged
to accumulate reseS~s OF Is per cent OF
their deposits, but Of this only per ceEk
was TO be held I'm cash in their own vaults.
per cent being allowed TO remain on de-
post with the banks, where it figured, of
course. in the reserve OF those institutions
also and per cent was allowed to be in
vested I'm designated securities with the
dependence of the trust companies In an
emergency on the reserves of the banks
demonstrated as II has been by recent
events, the enforcement OF additional re-
serve requirements upon the trust COM
Panies. either by central authority among
themselves or In conjunction with the clear
ing house banks, or by local enactment. is
expected to result as a consequences OF pres
ent experience.
In the stock market the disturbed finan-
clal conditions naturally found some re-
Election and there was some clearing away
OF wreckage. such is Inevitable from a
eonvuision like that which swept the mar
kets the week before. Operations were
hampered by the obstruction to the work
ing Of the machinery OF the money and ex-
change markets In spite OF these obstacles,
however there was reported 10 be going
on buying for cash and for investment on
scale such as Is not recalled by the Oldest
observers This demand is for both home
and foreign account. Principal interest,
from the standpoint OF the stock market,
now turns to the outcome OF events:
Credit Currency Advocated.
That permanent relief FROM the present
monetary stringency can only be had
through system Of credit currency adc-
quate TO meet the requirements OF trade
and redeemable in gold coin was the opin-
Ion expressed today by Representative
Charles Fowler OF New Jersey. chairman
OF the banking and currency committee.
which viii, at the coming session OF con
gress, endeavOr 20 have a law passed pre-
viding for credit currency issued By the
national banks. Until such permanent ro-
lief Is made possible by legislative en-
actment Mr.. Fowler asserted, the situation
must be met by the Issuance OF clearing
house certificates cashferss ohactre 80
due bills OF business houses and manufac-
turers.
The underlying business conditions"
he said to the Associated Press today.
are essentially sound as evidenced by
the increased earnings OF railroads ana
che fact that the value OF our agricultural
products this year are $500 Onn 600 MN.