New-York tribune., 1908-01-13
THE WEEK IN WALL STREET.

With the wiping out of the deficit in reserve
of the associated banks of New York, which
had existed for eleven weeks and winch seven
weeks ago stood st more than S54'Ooo'0oc' the
bank statement of Saturday showing surplus
of ss os4 050 the money market may be said to
have reached almost normal conditions again, a
state which will very soon be arrived at when
the last of the Clearing House certificates shall
have been retired. The establishment OF that
surplus which replaced a deficit of more than
s1l. 900 900 reported a week previously, was the
result of an extremely heavy increase in the
cash holdings of the banks well as a large
reduction in the volume of loans, the increase
tn cash. which much larger than had been
looked for, representing to a considerable eX-
tent the return of boarded money TO circuia-
ton, which means the restoration of confidence
in the soundness of banking institutions. The
movement under way may be expected TO
continue for indefinite period. for scores OF
millions of dollars still boarded by private ndl-
viduals and held by banks in the interior as an
emergency reserve will gradually be released,
most of these funds ultimately finding their way
to New York.
Abroad as well as here the money stringency
is relaxing and confidence is returning. as IS
evidenced by the easier tone for private dis
counts in all of the financial centres of Europe
and the lowering of the official rates of dis
count of the Bank of France and the Austro-
Hungarian Bank The Bank of England. in
deed, which q week previously had reduced its
change last week. although the proportion of
reserve TO liabilities larger than at the cor
responding date in many years: but this failure
to act may have been due TO the fact that the
s15.000000 borrowed from the Bank of France a
few months ago must be repaid in February.
The Bank of England. il is generally believed,
will announce A reduction in its rate this week.
and the Imperial Bank Of Germany is expected
to take the same atciOn.
Rates for money. as the result of the con-
a--, ,F F1rr, H.
are becoming decidedly easier, the call ioan rate
having worked down in the last week to around
per cent and time money being once more
in fairly ample supply at per cent for all
maturities up 10 six months while borrowers on
commercial paper again finding 1t possible
to get accommodation from the banks at mutu
ally satisfactory rates. A further decline IN
rates for time money, which with the rapid in
crease in the supply of loanable funds should
soon be witnessed, will he speedily followed by
the disapp pearance of the Clearing House GER
tifcates which are believed already to have
been retired in large measure, for banks will
naturally not continue paying per cent inter
est on these obligations when il becomes possible
for them TO borrow money at a lower rate
The Improvement in the money market. which
is itself an indication of returning confidence,
has worked for the benefit of securities prices
! which in the last week have made material ad-
! Vances Strength and activity have character
| lied the bond department of the Stock Ex-
| change as we'll as the market for stocks. in
which the bullish sentiment has at times
| amounted to buoyancy. The advance which the
! market has enjoyed since the beginning OF the
| year has been justified by the real progress
/ made in the recovery from panic conditions,
but the continuance of that advance beyond the
point measuring the actual extent of the i'm
/ provement should not be looked for at present
! The stock market which in the decline in prices
which began year or more ago anticipated the
! business recession now recognized as TACT by
will fOreShddOw
ward movement the business revival which viii
] by and by set in; but there is no reason to be-
! lieve that the current boom in stocks Is more
| than the reflection of the happy emergence of
| the country from panic state. The rally may
| go further but when checked the market will
! probably relapse into dulness following which,
! no one can say how many months hence, may
| begin the real advance which will be the fore
| runner of period of prosperity commensurate
! with the most favorable yet enjoyed by the
! United States.
! TIE receivershp for the Chicago Great West
| ern Railway Company, coming soon after that of
the Seaboard Air Line, gave momentary chill
TO the bulish enthusiasm in the stock market,
| as il called attention to the fact that money
market conditions, although easing, were not yet
easy; and predictions We're freely made that GER
tain other of the weaker roads would not sur
! vive the present seas Of stress without being
( obliged to undergo reorganization. This belief
| is widely held. Railroads in all parts of the
! country are reporting decreased gross and net
earnings due TO the falling off in general bust-
ness and due also in some instances to the anti
! railroad legislation enacted in many states. The
| Chicago Great Western, never a strong road, has
| suffered from a combination of these two causes
and also from the ending of its rate-cutting
! license bv the enactment Of the railroad rate
| law-for II was long conspicuous rate cut
ter As 4 whole, however, the railroads of the
| United States III strong position, and there
| is no reason TO look for, reorganization move
! nlent of such magnitude that which followed
the last panic The Southern Railway has its
| heavy burdens to bear, and after the announce
| ment Of the Chicago Great Western receivershp
| rllmors affecting it were circulated, which
favorably affected the prices of its bonds and
stocks Fortunately these rumors were speedily
| declared to be unfounded, and the securities
/ covered.
| The important announcement was made at the
annual meeting of the American Sugar Refining
Company that in future detailed information of
| the operations of the company would be given to
| the stockholders. This company, under the ad
| ninistration of the late President Havemeyer,
| was conducted close corporation, notwith
standing the fact that its shareholders numbered
many thousands; and the pledge of the new
management adds another TO the too small list
| of industrial corporations, headed by the United
States Steel Corporation. which have adopted the
! policy OF publicity policy which is steadily if
| slowly, making progress toward general accept
| apce.