The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1907-11-04
SITUATION IS
MUCH BETTER
EarIy Arrival of Gold From En-
rope Expected to Put an End
to the Financial Fl1rry.
CURRENCY REFORM PLANS
LATED.
CURRENCY REFORM PLANS

New York. Nov. S-Last week was Civ
en- over to the work of rehabilitation or
financial conditions and much progress
was made. although there remained many
elements of disorder in the situation.
owing to the dislocation of exchange IA
cilities in the money and commercial
markets This was inevitable from the
shock OF the preceding weeks events in
New York. But the situation has been
well in hand and success was met in linn
ting the range of the disturbance and IN
the initiation of measures TO insure cor
rectiOn and settlement
OF these the most vital was the large
amount of COLO secured from foreign
countries for importation now afloat
towards New York The gold engage
ments have reached the neighborhoOd of
so 100000 and this week this broad stream
viii flow into New York banks. The
feeling that this supply was EN- route
has done much to fortify confidence, but
the actual reyiving effect on banking
and money operations waits the arrival
of the gold. Meantime. the example set
by New York in the adoption of clearing
balances between the banks has been fol-
lowed by the great money centers and
has safeguarded the banks
Increased Circulation.
Further important relief is looked for
from the facilities extended by the comp
troller of the currency for the increased
bank note circulation.
The government bonds are made avail
able as security to take out additional
bank notes and this will afford largely
increased resources for supplying the
urgent requirements for currency, which
forms one of the severest trials OF the
situation.
The conditions which have had to be
met in the recent crisis have given a
strong impetus to the movement for pro-
ed to induce early action by congress TO
authorize new forms of bank note is
sues The experience of the country in
a period of high prosperity and active
business and industry and with the bank
ing position sound and solvent i'm coming
almost to a deadlock for lack Of means
10 make banking resources quickly avail
able for the needs of the circulation has
made a deep impression in intoxicating the
needs of an emergency circulation which
can expand quickly in time of need.
The Trust Company.
In another direction it is practically
certain that measures OF correction viii
be adopted for the trust companies posi-
ton in New York, which is now seen to
have proved the weak link in the finan-
cial chain. Here again the solvency Of
institutions did not avail to meet sudden
demands of depOSitOrs without recourse
10 the banks for assistance. the assistance
thus rendered proving the strain that pre-
banks for several years have voiced their
discomfort with the trust companies po-
sition, which was due to the great growth
OF these institutions and their undertake
ing Of purely banking functions in the
acceptance of large deposits subject TO
check and to payment on demand without
obligations to maintain cash reserves in
the proportion enforced on the banks.
Efforts of banks TO cOerce the trust COM
panies in this regard led to the with
draWal several years ago. of most of the
trust companies from the privilege of
clearing through the banks. Under the
opera ton of last years New York state
law the trust companies had been
obliged to accumulate a reserve of Is
per cent of their deposits, but of this
only per cent was to be held in cash in
lowed to remain on deposit with banks,
where il figured, of course. in the re
serve of those institutions also, and per
cent was allowed TO be invested in desig
mated securities
Increased Reserves.
With the dependence of the trust COM
panies in an emergency on the reserves
of the banks, demonstrated as it has been
by recent events, the enforcement. of adj
ditional reserve requirements upon the
trust companies, either by central au-
thority among themselves or in conjunc-
ton with the clearing house banks, or by
legal enactment, is expected to result as
a consequence Of present experience.
In the stock market the disturbed
financial conditions naturally found some
reflection and there was some clearing
away of wreckage, such as is inevitable
from a CONFUSION like that which swept
the markets the week before. Operations
were hampere1 by the distractions to
the working of the machinery of the
money and exchange markets. In spite
of these obstacles, however. there was
reported TO be going or buying for cash
and for investment on a scale such as is
not recalled by the oldest observers. This
demand is for both home and foreign ac-
counts. Principal interest from the
standpoint OF the stock market now turns
to the outcome of events in the general
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