The Montgomery advertiser., 1908-01-27
FINANCIAL REVIEW,

New York, Jan. 2e.--The feature of the financial situation last week was the continued rush of funds back into the reserve deposits of the banks. with exhaustive effect, however. in stimu- lating any strength in the market for securities. The returning flood of money to reserves was perceptfbIe fn the foreign money eenters as well as here and was effective in forcing down the ofnc.al discount rates of the Rank of England, the Bank of France ana the Imperial Bank of Germany. and the open market rates in ali mark cts. Notwithstanding this decline in the at- traction Tor money abroad, the price has risen strongly towards the rate at which exports of gold would be profit able. The growing redundancy of our money market has been responsible for this action. Supplies have pressed upon the New York loan market with Increasing urgency. carrying the call loan rate down to almost nominal fig- ures and reducing the interest rates On time loans to figures lower than were enjoyed at any other time last year. The remaining Issues of New York clearing house loan certificates has as consequence been going into rapid retirement. The rapid casing of the money market has not been affected by the notice of withdrawal of SIG, ,oOo.- 900 of Government deposits from the New York banks, partly because of the large current deficit in the Government revenues. but also by reason of the &C., curnulation of sums being more rapid than the demand to take them up. This Is made manifest by the heavy tide of bank notes out of the circulation of the country, reflected in the current redemption of these issues at the United States treasury and by the nrfmUs rxrs khA rk Sa IA banks to retire them by means of de- post of lawful money with tn United States treasury. The inferences are plain that the heavy imports Of sf00,. 100000 of foreign sold and the rapid issue of over s5o,0o0,00 national bank notes which followed the runs on the banks last fall to say nothing of the various emergency issues of clearing house certificates, are now proving re- dundant in the country's circulation, Such a result fs the invar.able se- quence of financial paeic ae soon as normal conditions of confidence in the banks begin to re-establish themselves. The development was foreseen with such confidence that speculative opera tions In the secuEities markets had been largely concluded in anticipation of the event. The disposition to real ize profits, manifest last week. was, therefore, normal and to be expected.
 Tn addition to this normal tendency towards reaction, there has been some renewed influence of depression in the contemplation of some of the after effects of the financial crisis now pass ed. The weight and volume of the re- turn How of funds to banking reserves are. in themselves. eloquent of the con- traction of the needs of the circula- tion and the shr:nkage in commercial and industrial activity. Other signs are ahundantly corroborative. Decrease of bank clearings are the rule the coun- try over. Railroad earnings have fall on of to degree that brings into question the rate of future distribu- tion on securities with contingent lia- bilities. while even fixed liabilities are brought into doubtful security, in the case of some of the weaker proper ties.
 Advices from the iron and steel s--.