The Birmingham age-herald., 1908-01-27
The Banking Situation Is Rap idly Rtgaining Former
 Conditions
CALL MONEY CHEAPER
 THAN FOR YEAR BEFORE
Rapid Easing of Money Market Hss Not 6e@n Affected by Notice of Withdrawal of Gov.
 ernment Deposits.

New York, January e6.-The feature of the financial situation of the past week vas 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 se- curities
 The returning flood Of money to re- serves was perceptible Nin the foreign money centers. as well as here and was effective in forcing down the official discount rates of the Bank of England. the Bank of France, and the Imperial Bank of Germany, and the open market rates in all markets. Notwithstanding this decline in the attraction for money abroad, the price has risen strongly to- ward the rate at which exports of gold would be profitable.
 The growing redundancy O. our money market nas been responsible for this &C., tion Supplies lsve pressed upon the New York loan market with increasing urgency carrying the call loan rate down to al- most nominal figures and reducing the ln- terest rates on time loans to figures lower than were enjoyed at any time last year The remaining issue of New York clear ing house loan certificates has, as con sequence, been going into rapid retire. ment
 The rapid easing of the money market has not been affected by the notice of withdrawal of s1o0Oo,oOO of government de- posts from the New York banks. partly because of the large current deficit in the government revenues but also by reason of the accumulation 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 this issue at the United States treasury and by the grow ing movement on the part of the banks to retire them by means Of deposit of law full money with the United States treas ury.
 Heavy Imports.
 The differences are plain that the heavy imports of 1OO,o00.OO0 of for eign gold and the rapid issue of over S50000.OOO 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 redunoant in the country circulation. Such result is the invari- able sequence Of financial panic as soon as normal conditions of confidence in the banks begin to re-esta blish themselves. The development was foreseen with such confidence that speculative operations in the securities market had been largely concluded in anticipation of the event. The disposition to realize profits manifest last week was therefore normal and to be expected.
 In addition to this normal tendency to- ward reaction, there has been some re- newed influence of depression in the con- temptation of some of the after-effects of the financial crisis now passed. The weight and volume of the return flow of funds to banking reserves are in them selves eloquent of the contraction of the needs of the circulation and the shrink age in commercial and industrial activity. Other signs are abundantly corroborative. Decrease of bank clearings are the rule the country over. Railroad earnings have fallen off to a degree that brings into question the rate of future distribution on securities with contingent liabilities, while even fixed liabilities are brought into doubtful security in the case of some of the weaker properties.
 Iron and Steel Trades.
 Advices from the iron and steel trades
  to have ensued upon the financial crisis, although some moderate resumption Is reported to have occurred since The re- port to be published on Tuesday of this week of the earnings of the United States Steel Corporation for the quarter ended December 31 Is awaited. nevertheless. with some solicitude. and the showing to be made for the current quarter is also sub ject of anxious surmise.
 Notwithstanding the actual existence of conditions indicating this contraction of prospects activity there is not lacking evidence of hope in early improvement The increasing abundance of money re- sources Is looked to as an effective help to this revival The doubtful element on the side of the money situation Is sug- gested by the continued disposition of large corporations to finance their re- ouirements with short-time obligations. on which also the interest rate Is kept high notwithstanding the material reduc- ton Of rates on ordinary loans.
 The implication of impairment of credit for purposes of corporation borrowing or of unrelieved scarcity of capital supplies for use in fixed investments makes one of the conservative influences in the halt ing tendency which was the feature of the week in markets.