The Cairo bulletin. (Cairo, Ill.) 1???-1928, 1908-01-27

lIounced ease III money. rms Is cor
dition which always follows sue
! financial upheavals as we have recen
ly passed through. At such times larg
sums locked up In speculative yer
lures are released; both speculation
and business contract; credit is cui
tailed, and declining prices for secul
tiles and commodities have the effec
OF practically increasing the suppl
of available funds. This tendenc,
toward easier rates is world wide. TIL
Bank of England cnce more reduce
: its rate, this from to 4 per cent an
the Bank of France from 81 to 9 pc
cent to conform to the lower rate
OF the open market. 1t is expecte,
that the Bank of Germany will shortl
follow suit leaving rates at that cen
; ter relatively higher than elsewhere
owing torecent strained conditions il
the Berlin market The decline II
! interest rates in the United States
has naturally been much more precip
itons than abroad. for the reason thai
IN the last three months Of 1907 the
rates here We're abnormally high
Everything points to continued easy
rates in American money markets
not only on accoutn CT lessened de
mand, but also because of the extra
ordinary expansion which has recent
| ~ taken place in our circulation. Be
tween the two banks calls of August
~ and December 8, period of about
lltteen weeks, it is estimated thar
there We're an expansion of nearly
$275.00O,0O0 in our circulating medium
made up Of about $4,000, 900 in bank
notes, $75,000.000 clearing house certi
ficates, $73,Q00,000 of additional gov.
eminent deposits and $4,000. 900 in
gold exports. This IS certainly not
an oyerestimate of the relief extend
ed during the panic; for the total
amount of clearing house certificates
issued In various cities was consider
ably above the amount mentioned and
the entire gold import movement
amounted to nearly 800, 100000.
1t is but proper to remember, how
ever, that some of these items in the
relief account are being rapidly re-
duced. Clearing house certificates at
New York will soon be entirely can.
.eelled. The government is now stead
lily withdrawing its deposits from the
banks, having recently issued its sec
ond call of $10,000,000: making nearly
S2o.000,0o0 reduction since the panic.
Now comes the prospect of our losing
more or less of the gold imported
since October. Sterling exchange has
advanced close to the gold shipping
point, and 1t is estimated that at
least $20000.000 may be shortly sent
back to Europe; although reduction I'm
foreign bank rates will delay this
movement There is also another Gle.
ment in the situation which must not
cd lost sight of, and that is the financ. |
ing OF new issues previously arranged
for but postponed by the extraordi. |
nary stringeney of 1907. Several inn. |
portant issues have already been ar.
ranged for; such as New York Cen.
tral' Rock Island, Delaware & Hudson
Pacific. New York CITY. etc |
lhe remaining influences contributing
10 ease at this center, therefore. viii
De the large increase In bank note
which is about 500 900.
300 larger than a year ago: the return
of crop funds and boarded money from,
he interior in large sums; the lessen.
ed demand for money for business mr.
poses; the lower prices for securities
and the great and sustained Increase
N the worlds gold production. Funds
are already accommodating at this cen.
er at a very rapid rate On Januar,.
the local bank reserves showed a |
iehcit of $ll,500.00O. On January is |
mere was surplus OF S22 600. 900. a |
'ain CT $34100.000 in the short space |
u two weeks. A still further large |
addition to reserves is probable this
week. owing to the unusual influx
rom the interior. These sudden
manages are partly due to the return
d crop money. but mainly to the re.
urn of funds sent 10 interior hanks
turing the panic. Fer some time 10
'ome we are undoubtedly likely To
zee an increasing accumulation of idle
uhds and low rates for call money.
lad We an elastic currency system bv
7hlch the bank notes issued durin,
he last year could be promptly retir.
d, We should probably have been
aVed from these violent fluctuations
interest rates. such as are witness
q IN no other civilized country: but
ince bank note redemptions are linn
ted to s9.0O0.000 per month. il is evi.
ent that no efficient regulation can
e expected by such means. A re-
undant money market can have but
nc effect upon securities: and that
iniiationary. It is true that rail
cal and industrial earnings are m
satisfactory. Perhaps profits and div
ends viii decline. for business is con-
raeting. traffic declining and the mum.
er Ct unemployed is daily Increasing
hese are all elements Of depression .
hitch cannot be ignored. Yet for the !
me being. at least they are entire-y
ver-shadowed in The stock market
y the fact that cheap money will In