The morning journal-courier., 1908-01-27
FINANCIAL REVIEW Rush of Funds Back to Reserves
 the Feature Here and n Abroad. REACTION IS ANTICIPATED Report of Steel Corporation for the Last Quarter Anxiously
 Awaited.
(By Associated Press.)

(By Associated PressD
 New York, Jan. 26.-The feature ot the financial situation last week was the continued rush of funds back into the reserve deposits of the banks with the exhausted effect, however, 1T stimulating any strength in the mark ct for securities The returning flood of money to reserves was perceptible in the foreign money centers as vel as here and was effective in forcing down the official discount rates of tho Bank of England. the Bank of France and the Imperial Bank of Germany and the open market rates in al markets Notwithstanding this de cline in the attraction for money abroad the price has risen strongly towards the rate at which exports oi gold would be profitable. The grow ing redundancy of our own money market has been responsible for this action. Supplies have pressed upon the New York loan market with h. creasing urgency, carrying the cal loan rate down to almost nominal fig ures and reducing the interest rates on time loans to figures lower than were enjoyed at any time last year The remaining issue of New York clearing house loan certificates has. as a consequence, been going into rapid retirement The rapid easing of the money market has not been affected by the notice of withdrawal of $10,- 100000 of government deposits from the New York banks. partly because of the large current deficit In the gov ernment revenues. but also by reason of the accumulation of funds 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, reflect ed in the currency redemption of these issues at the United States treas ury. and by the growing movement on means of deposit of lawful money with the United States treasury The differences are plain that the heavy imports of s10o,000,000 of foreign gold and the rapid issue of over s50,- 000,000 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 redun- dant in the country's circulationSSuch result is the invariable sequence of financial panic as soon as normal con af i,, Ln y,1y ha gin to re-establish themselves. The development was foreseen with such confidence that speculative operations in the securities markets had been largely concluded in anticipation of the event. The disposition is to real ze profits manifest last week was, therefore, normal and to by expected
 In addition to this normal tendency towards reaction there has been some renewed influence of depression in the contemplation of some of the after ef- fects of the financial crisis now passed The weight and volume of the return flow of funds to banking reserves are in themselves, eloquent of the contrac- ton of the needs of the circulation and the shrinkage is commercial and in- dustrial activity Other signs are abundantly corroborative Decrease oi bank clearings are the rule the coun- try over Railroad earnings have fall en off to a degree that brings into question the rate of future determina- ton on securities with contingent lia- bilities while even fixed liabilities re brought into doubtful security in the case of some of the weaker properties. Advices from the iron and steel trade show condition of practical paralysis to have ensued from the financial cris- Is, although some moderate resumption Is reported 10 have occurred since. The report to be published on Tuesday Of this week of the earnings of the United States Steel corporation for the quar- ter ending December S1. is awaited. nevertheless, with some solicitude and the showing to be made for the cur rent quarter is also subject of anxious surmise. The reported decision of the principal productions of iron and steel to maintain prices is discussed with some variety of opinion as to the ef- feet on an early resumption of demand In the trade and in contrast to the weeks example of drastic cut in cot ton goods for the purpose of stimulat- Ing a prompt revival of consumption Extensive plans for curtailment and economies, especially amongst the rail- roads, to which the rates of compensa- ton for service are held with some rig ldity, keep alive attention to the utter Tor effects to be looked for from this contraction of the distribution in wages with its concomitant reduction of con- sumption of commodities.
 Notwithstanding the actual existence of conditions indicating this heavy contraction of prosperous activities there is not lacking evidence of hope in early improvement. The increasing abundance of money resources is look ed to as an effective help to this re- vival The doubtful element on the side of the money situation is suggest ed by the continued disposition of large corporations to finance their require menls Wlth snort tune opllsdllOnS. on which also the interest rate is kept high. notwithstanding the material re- auction of rates on ordinary loans The implication of impa irment of credit for purposes of corporation borrowing or ,f unrelieved scarcity Of capital SUD- plies for use in fixed investments makes one of the conservative inf1u- snces in the haltine tendency which was the feature of ths week in the markets.