The San Francisco call., 1909-01-28
THE MONEY SITUATION
Movement of Gold, Both In Domestic
and International Channels

The New York circular of Henry Clews says
Just now our money market is being subjected
to a number of unusual demands. Gold has re-
Gently been exported to about 81, 100000, and the
current movement is expected to reach $2a>S
shortly be obliged to withdraw $40,0o0,000 to
$50. .000, 900 before February l to comply with
requirements OF the reserve law. Much OF this
will probably be provided for in advance; never
theless considerable sums must be temporarily
withdrawn from the money market in such an
operation. Again, the government deficit neces-
states the withdrawal of public deposits from
the banks. and about $15,000.000 will be sur
rendered on January %; also another $40 600 ,0O0
February 10. If to these requirements we
add the obligations incurred by recent heavy
bond issues, II Will be found that the demands
upon the local money market have been unusual
" heavy. The onerings OF the S<oVVoo,uoo
Russian the 900 Canadian loan and other
foreign issues snow thal the uehiahus upon
capital abroad are also on an extensive scale.
So far the banking situation at home is con-
cerned there is not the slightest cause for con.
Our banks are exceedingly strong, ana
the great expansion in loans which has taken
place during the last few months is shown
to be amply protected by the large increase
in resources Owing partly to the quietness in
business and partly to the expansion of our
currency. banks almost surfeited with
''The causes for this state of affairs not
satisfactory, and it would be pleasing to see
at time when it is not needed. Yet there IS
reason for confidence in the general strength
and soundness of the banking situation.
MONEY ABUNDANT
For all legitimate enterprises Inere is an
abundance of money, which will eventually be a
powerful stimulant toward recovery. Funds are
returning freely from the interior, and we can
readily spare gold to Europe If needed. In
deed some of our bankers would gladly see
an efflux of more liberal proportions provided it
resulted in slightly stifenng interest rates. But
much depends in this respect the course OF
events in Paris, where the urgency for accu-
mulatng gold will probably disappear or mod
crate now that the Russian loan is out of the
way. Much, too. depends the policy of the
Bank of England. which has been anxious to
strengthen its reserves and may now find 1t
more easy to do so. At best the outlook for
money in the foreign money market Is uncer-
tain. and the tone of financial affairs over there
is one of decided conservatism if not of de-
preston.
'.Indscreet buying of stocks has been dis
eouraged recently by conservative commission
firms. The idea that prices were held at too
high level is now permeating also all classes
of operators from the big financial leaders to
the small investors; therefore, the process of
readjustment which has been long delayed is
in progress Security values have already had
moderate shrinkage; and as the short interest
and resulting rallies But general pronounced
recovery is I'm sight. and can not be expected
until liquidation is more complete and unfavor-
able conditions have been adequately discounted.
CONDITION OF TRADE
"A most unsatisfactory feature at the mo
ment is the dullness of trade. January is prov
ing a disappointment in this respect and the
volume of business Will unquestionably be con-
siderably below that of December. The iron
trade is exceedingly quiet, and not employed to
ceased placing orders mainly because they have
satisfied urgent requirements and inclined
to postpone further orders in expectation of Sc
curing further concessions In values. Railroad
as shown by the continued large number of un-
empoyed cars