The Washington times., 1910-07-10
UPWARD TREND OF STOCKS CHECKED
BY GREAT SPRING WHEAT SHORTAGE
Upset Calculations Corn Which Good Con
But Nervousness Expected Dominate Trade
From low On
By JOHN GRANT DATER,
special sIunsey


: is greatly IsGuced- Eowev e.. as al
be determined
That we have an abnormal money
and credit situation IS quite a larens-
Despite the heavy loss IN cash and sur
81 is reserve and the heavy loan eX-
DansiOn shown IN the bank statement
# July 2, call loans ruled al from ~
peT cent n 3 per cent during tn- vice.
( Time money. however, hardened ua-
terially, and on Friday ; per cent was
freely bid for six months money, but
very little was obtainabie az that rate
IN fact. q number Of large banks with
/ drew from the time money loan market
entirely
The banks explained this action or
the score that the demand from tie
/ interior was already so heavy that they
aid not see their way clear TO loan On
I stock collateral 70 outside borrowers.
fss they felt themselves obliged to re-
{ serve their funds for their own bank
ing and mercantile customers For LIE
! considerations these banks, Including
! some Of the most important IN the CITY,
I have ceased buying Commercial paper,
AMI there IS every indication that the
| commercial borrower viii be on a 8
! Per cent basis for discount before many
! weeks have Iassed.
Gold Import Engagements
The offering during the week Of
/ 100000 Missouri Kansas & Texas ;
rer cent one year notes al g. OF upon
] IT =
/ dicaJiag that the company paid Z per
I rsnt OF more FOR fts money, shows quite
I clearly that the % per cent 10 3 per
4 cent money rate is abnormal and not
( truly representative Of money market
/ London cables reported that market
as disturbed at the high inter est al
which the Missouri. Kansas ans Tex
as road secured its funds and IN
This connection. IT. is noted that the
immediate response which the Lon
don money market made 10 The spe-
7 CiaI gold import engagement OF
SI.750.Geo. was an advance IN the
open market discount rate on FOUR
successive days, carrying tnaI rate
up about z per cent since tues
Higher interest rates here viii as
sureCIy attract gold from LONDON,
but in the light OF developments the
initial import seems TO have been IN
fortunate Foreign bankers II the
lefty express the opinion that but Tor
the week gold euEa cement the mini
mum discount rate or me BANK OF
probably have been reduced 10 Z
per cent. But the spectacle Of New
i York importing sold with demand
bills from = OF cent 10 a cent II
the pound sterling above the rate AT
which sold could be imported as q
natural operation. thus entalllng a
considerable loss on the deal was
too much for London, particularly
when il saw that the operation was
directly connected with speculative
Upbiddiug in the stock market
So London, II seems has EOIie on
the defensive. maintaining tne bank
rate unchanged and MARKING Up
open market discounts, when vas
i followed By a sharp advance III de-
! raud sterling exchange here, ConSe-
aueutIy IL has been made q little
i more difficult than II was before Tor
Us 10 obtain gold from Europe
1 The Bank Statement
/ Saturdays bank statement was 4
u hizhlv confusing affair From it the
II speculative element could extract
4 some comfort, or ind Condrnatic1 Tor
I pessimistic opinions as 20 the --caey
market, as suited the Ind.-.jual
stock market opinion
/. The showing under the old system
OF averages was very poor. lncieati M.
a loss Of S7.59l,Soo N surplus re-
o. serve against all deposits cash loss
OF SI8-5lT,0c0. reduction OF $500
= zoo in loans, and reduction or 80
? 100000 in deposits while the actual
. statement showed an iCreaSe in sur
plus reserve OF SlU,o3s,o1y, gain II
J 1 cash OF S$,S54r3el, reduction OF ga
02l.100 ia loans and a redIcIloh o.
S24.I4Z,eo9 IN deposits
& No doubt the statement Is very mucf
, confused by three principal causes
the half yearly requirements. the s.
] I uulta2eOus call for the co1oltlon o.
3 ratioua and State banks and tTus
. companies as Of June 90, and the
i heavy holiday demand for cash Over
Jt the holidays
( An ANALYSIS % the statement sEoWl
( that the payments TO the GOTCTumen
p Ola account OF the corporation tax
p which IL was thought played an i'm
10 portaut part in The nearly Si9.U0u,9g'
{ cash loss in the preceding week doe:
{ not figure, Is Government deposiJ.
s were bur S1,TZ6-10o. against SZ.olt.oyi
I in the preceding week
The great increase OF S10-o39-Soo II
surplus reserve. shown in the aCtua
I statement. is due not 20 increased
, cash. as only SS.S5z.200 of the SO.
. G6o. c60 loss in the preceding weeE
T. flowed back. but TO the l6aVy con
q fractions in deposits Liabilities Whlci
. tIeduced the reserve requirement bl
? S6.l53.275.
In the actual statement loans exceed
o deposits by S23.645-130, and IN the &C
, tuaI statement loans exceed de
- pOsits by s2S.442.29e- In the aver
- aCe statement the surplus reserve o
- S26.55o compares with SSZr0H2.90i
p I In 1909 and S4I.O5S.250 in 1908. In TIT
: actual statement the surplus reserve
5 OF slS.7Ss.Iu0 compares with SS4,029.
( 500 in 1903.
7 Doubtless II is the excess Of loans
D over deposits and che diminished sur
n r1,ls reserve so close 10 the CrOp-mOV
3 fnE period that influenced the advanCr
n Of time money during the week