New-York tribune., 1909-11-15
FINANCIAL MARKET
MONEY RATES HIGH.
Stocks Dill and Fluctuating-
Ranks Loans Reduced.

disregarded by the stock market, was
the chief factor influencing the course
of that market during the last week.
With money rates hardening. and no
prospect of real relief for several weeks.
operations for a further advance in
stocks were very properly curtailed. the
market relapsing into a state OF COM
narrative dulness. with the price fiuctua-
tions closely following the money mar
ket indications. although the range or
those fluctuations was so narrow as to
demonstrate the underlying strength or
the market for securities, based upon
the known condition of prosperity in the
trade and industry Of the country. one
cause Of apprehension was lessened by
the announcement on Thursday that the
Bank Of England had found IL unneces-
sarv 20 advance its discount rate from
the > per cent figure, which had proved
effective in attracting gold from France
and elsewhere, and in bringing the
banks reserve up TO a condition so sat
isfactory as to make il improbable that
the rate would Ice raised within the
coming few weeks.
The hardening Of rates for money in
this market for both call and time loans
had been in part due TO the fear of n
higher Bank of England rate. bat other
causes co-operated TO keep money dear
here after the removal of that appre-
hension, chief among them the weak
condition of the Associated Banks of
New York, which had shown a surplus
reserve of only about S5.oo0,0oo week
ago and since then had been losing
money heavily through shipments to the
interiOr, ordinary Sub-Treasury opera
tions and the expectation OF million
and A half gold TO South America for
London account In Chicago for two
days New York exchange ruled at 30
cents discount. indicating an extensive
and urgent demand for funds which
might result in material drawing
down of the balances of Chicago banks
in local institutions. That demand was
relaxed on Friday, when. however, the
call rate in New York rose 10 g per
cent. level touched only once previous
ly this year, and the banks called loans
heavily. There had been little liquida-
ton in stocks during the week. and the
Of money were for a loss of cash so
heavy as 10 make highly probable this
extinction of the surplus reserve and
the reporting instead of a deficit on sat
urday. But the banks are accustomed
to move in mysterious way and the
strength Of the stock market on Satur-
day gave evidence of a coming bank
statement far more favorable than
could have been believed possible earlier
in the week.
The statement fully Justified the late
expectation. showing in its average
form a Joss of less than S5oo0OO0 cash.
comparing with the indicated $1,000
0o; and a reduction OF nearly S21 .oO0.-
oO0 in loans and more than S26Oo0.O00
in deposits the surplus reserve increas-
ing Sl726425; while the actual state
ment showed much stronger position.
The trust companies statement dis
played a slight increase in loans. but n
decrease in deposits of more than $40
o00.1e0. which showed that much of the
loan reduction by the banks had been
effected boy the assumption of loans by
customers of the trust companies, who
had withdrawn their deposits for use
in direct loans in the market, a move
ment in which private banking houses
and European lenders, attracted by the
high rates for money undoubtedly par
ticipated largely.
This vast shifting Of loans from the
Clearing House institutions probably
had a twofold explanation. Stocks are
srI,
understood TO be largely in strong
hands" and these powerful interests.
confident in the advance Of securities
values 10 higher levels early in 1910,
when the money stringency is expected
t. ease, with the SHd-of-the-ye re-
quirements met and with the return of
the funds now employed in financing
the movement of the grain and cotton
crops are believed to have been desir-
Gus Of averting a widespread liquida-
tion movement. such as would have fol-
lowed the announcement Of a deficit in
the legal reserve OF the banks-for the
New York hank statement has a strong
influence upon sentiment among stock
market operators and spectators and
II may be assumed that these great in
tcrests, whose voice in bank manage
mcnt is very influential. have lent their
counsel To- the policy Of a loan transfer
movement which should maintain the
surplus reserve. one of the motives act
uatinS the Chicago banks i'm recalling
funds on deposit here was said TO be the
necessity Of strengthening their position
in view of an expected call from the
Controller 81 the Currency for state
ments of condition. and the same motive
may explain in part the loan shifting II
tie local Clearing House institutions,
most of which are national banks. and
the reserves Of large number Of which
a week ago were below the legal re-
quiromenL
The principal stock market advances
81 the week were in tho specialties and
various low priced issues. with the cop
per stocks the leaders at the close.
Railroad stocks We're inaCtive, aud in
the Hin issues and ST Paul there was
q continuance Of heaviness. From all
parts Of the country are now heard re
ports Of demands by railroad employees
for increases Of wages based upon the
large returns from the heavy traffic now
being handled by the roads aud upon
the rapid advance in the cost Of living
During The depression following the