The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1908-01-24
Improvement in the
Money Situation.

Money Situation.
The New York Commercial, com
menting upon the rush of money tC
the New York banks and the passing
OF the late panic, brings out strongly.
even though only theoretically, some
of the worst evils in our monetary
system The Commercial says:
The bank statement of January II
exhibited a sudden change in the re-
serves rom deficit OF about 81, 800
900 a week before to surplus of over
$6,0tJ,G00, an increase in relation to
deposits of $17,500, 900 in one week.
Last Saturdays statement shows an
other increase of over $4,000 900, car
ryinS the surplus reserve above $22,-
100000. If government deposits were
excluded, as has been done in some
clearing house cities, and as was
countenanced by Secretary Shaw, the
surplus reserve of the New York clear
ing house banks would exceed $4O,-
000, 900.
This is partly the result of the re-
turning movement of currency from
the interior, common at this season Of
the year, but the rapidity with which
these reserves are beginning to pile
up is due to relief from panic condi-
tons and relaxation from abnormal
stringency. Not only is money, some
of which was unnecessarily drawn
away When 1t was most needed here
returning from the interior banks, but
that which was drawn out for hoard
ing IN the midst of panic is being re-
stored The redundancy which was
10 II.
ready well under way and the money
market is In danger of being sWamped
with low rates for loans of which ad-
vantage will be taken 10 stimulate
speculation. AS Offsets to excessive
ease there Will be the retirement of
clearing house certificates, the pro-
vision for trust company reserves, the
withdrawal of government deposits
ana possible gold exports later on; to
say nothing of renewed corporation
demands which were postponed by
previous stringeney.
Continuing-doubtles with a view
to assuring the public that it is all
right, however-the Commercial says:
With slackened activity in produc-
ton and trade, which Will continue
until prices and wages are adjusted to
normal level, there is a diminished
need of currency while the volume
has been Unfortunately increased in the
last three months. Besides the $780,
100000 of gold drawn from Europe
under the pressure of stringency and
high interest rates, the government
has exerted itself to produce an arti-
fetal expansion of bank circulation.
with the consequence that was easily
predicted. There is bound to be a
troublesome plethora of currency. The
bank notes, tied to the government
bonds deposited in the public treasury.
viii stay out, and the reserve Will con-
time to overflow until low money
rates and high exchange send gold
abroad where there will be more de- |
mand for ~.
And then the Commercial goes on |
30 point wherein Henry Clews was
right-as the Journal said at the time i
when he stood almost alone among
eastern financiers and prophesied that !
Cortelyou was creating an artificial |
plethora of circulation that would re-
suit in an undesirable reaction later
On. Here is what the Commercial /
says along these lines, though the ap-
plication of the Commercials words
to Cortelyou Is also only inferential:
The occasion is opportune for rub
Ding in" the fact that both the abnor-
nal stringency of past months and
the abnormal redunt ancy that con-
fronts us now come from the funda-
mental defect of our currency system.
Il the banks had been able to supply /
/ currency responsive to varying
needs, there would have been no such
lrawing of reserve money from one
sart of the country to another, no such
with inordinate rates for
oans, no such disturbance of conf
lence, no occasion for such an exces-
i've import OF gold for purposes of re-
lei, no artificial expansion of bank
and Of government iepos,.s.
md we should have escaped the iner-
table reaction from these morbid CON !.
Guons into others of the opposite ma
ure.
Now, what does this editorial from
he New York Commercial mean, in
he light of notorious fact? 1t means
imply and solely that the single
tandard Solonops of the republican /,
'arty have found their hard-and-fast
elbow panacea unable to prevent, in
he midst OF unprecedented plenty.
THAT would have been a disastrous