The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1908-01-06
MONEY MARKET Is ON
A SUBSTANTIAL BASIS
Confidence Has Been Fully Restored
Throughout the Country and Mon
ey From the Interior Flowing
Into New York Banks.

the new year sees a disposition reflected
in the financial markets to turn from
the contemplation of mournful yester-
days and to look forward with hope and
confidence to the future. The conclusion
is firmly based that Improvement is
ahead, but this conclusion has been tenn
pered by some anxiety over a possible
remnant of unpleasant consequences of
the financial crisis yet to be gone
through. A special field of uneasiness
was the provision for the demands of
the money market which were unusually
heavy while the resources of the money
market, although rapidly improving, were
much impaired.
The smoothness with which the turn
of the year was effected went far to
encourage sentiment and to establish the
confidence that steady improvement in the
financial position was to be expected
henceforth.
The call money did not get higher than
20 per cent, which compares with a
maximum of As per cent in the corre-
spending week of last year and 1875 per
cent in the year preceding. Still more
significant of the growing Improvement
of the position was the rapid dwindlng
and disappearance of the premiums on
gold, which signailstld the first business
day of the new year. So long as the
premium persisted an insurmountable OBJ
stacle remained to the re-esta blishment
of normal banking position.
The London market was so far reas-
sured by this development that a rapid
decline ensued in the London discount
rate and the Bank of England was con-
strained on Thursday to mark down it's
official discount rate from seven per cent
to six per cent in order to avoid losing
touch with the money market The sew
en- per cent bank rate was the signal of
continued distrust in the outside world
of the American position and it's aban-
donment marks the realization of faith
in the passing of our crisis.
Funds Coming In.
In New York additional funds have ap-
peared in the time loan market and busi-
ness in that department has taken on
some degree of activity although inter-
est rates continue high. Growing demand
fers promise of relief from one of the
most threatening sources of embarrass-
ment to come, growing out of the heavy
maturity falling due in that department
from time to time. The shrinking in
buying power, which has gone with the
financial upheaval, the slowness of coli
lections and the stringency of the money
off -
adequate accommodation for the extern
sion of needed credits, threatened a COM
bination of disastrous consequences that
were decided Experts In the New York
banks are more hopeful of needed ac-
commodations being forthcoming to facil-
itate the process of liquidation which is
a recognized necessity, to some extent
in commercial affairs, and which it is
now hoped may be conducted with de-
liberation and good order The publica-
ton of the bank statement at the close
of the week disclosed the free inflow Of
currency to New York for the week.
This development is of the utmost inn
portance as marking the passage of the
feeling of distrust : of New York bank
ing position and promising a rapid re-
establishment of the normal position.
Conditions Favorable.
It thus happens that the financial mar
kets have been disposed to ignore some
immediate unfavorable factors in affairs,
cheered by the Frightening financial
prospect. A striking example of this was
afforded in the stock market in the first
day of the new year. There oonverged
on this market the news of the receiver
ship of the Seaboard Air Line railway
and reports from Washington of an in
tended suit by the government to COM
pei the dissolution of the Hartman rail-
road merger The market wavered under
this shock. but the effect was temporary
and strong recovery ensued before the
end of the day. The course of railroad
earnings reported was another restrain
ing factor on immoderate enthusiasm over
values. Several of the great railroad
systems including notably the Atchison
and the Pennsylvania, showed a heavy
inroad on last years level of earnings in
the return for November, on account of
the heavy expansion expenses. Railroad
traffic officials, reporting the more
recent course of traffic, make candid ac-
counts of the rapid shrinkage in the
movement of merchandise of all kinds,
except grain and of their inability to
discern a probable source of early I'M
provement. SO
THE bond market is scanned with some
attention and interest from day to day,
to detect evidence of a renewed flow or
canital into investments. Some increase
Of activity was discoverable last week
but the demand was moderate, in spite
of the large disbursements of dividends
and interest to supply a fund for rein
yestment