The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1910-08-07

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Preserve position Of the associated banks
! has already been made clear. Although
| the amount above regal requirements is
large the bulk Of the surplus is held
/ by very few banks.
I The recent large accommodations I'm tie
banks do not as some persons infer, re
suit from BeaTy return flow of money
from the interior Much OF II Teprt sents
/ the free deposits of trust companies. As
! IS well known, Il Is the custom Of New
! York banks to allow interest at the rae
| Of per cent on trust company balances.
When, therefore, call rates fall below .
per cent, trust companies call their
! loans and Increase their free balances
[ in the banks The heavy expansion ~
bank loans recently, despite a Iiquidar-
ing market. results from the banks tax
ing over the loans Of the trust cOmpI-
MES. They have been. and are. lOaninE
al / and 10 per cent on cali trust COM
cent But the trust companies are not
making very much by this operation,
ioT. according to the last report OF the
State superintendent of banks. The
trust companies are buying their de-
posits al from 3 70 81 per cent
Il must occur TO anyone VINO stops TO
consider the matter that the New York
call money market IS IN no wise indica-
tive Of the existing monetary condi-
tons. The i 10 IL per cent rate con-
JTasJs with . 10 & per cent call money
at Boston. ; rer cent at Philadelphia,
and AZ 10 per cent at Chicago
Quite naturally, with a call rate Of
4 L.
stock collateral has relaxed somewhat
In quotations, but banks show no dis
position 10 press time money On FHe
market, az the lower quotation Of , per
cent for the January maturity IS clearly
more the result OF an absence OF Dor
rowing demand Than from free offerings
In the Wall Street i-4stltutiO1N one hears
that no one wants money. but turn aside
into the banks which cater Tor com
merciat business and one learns tnaT
there Is % very active demand from mer-
camille Borrowers mis- 3 cue 70 tne
strange construction In TIE cOll-i-crCiai
uzUer market. Unable 20 sell his paper
freely. or at an advantaEe Ous rate, lne
merchant has been driven back uDOn his
bank for his line Of discount OF course
the merchants line IS limited, and as
The demand for discounts IS very heaFy-
IN consequence Of the COfnUeTclal paper
situation, the mercantile borrower IS
tain the accommodation he desires. aid
a. present ne has TO pay close 10 the
legal rate for his money,
During the present week. for instance.
the great DRY goods commission houses
Of Worth street, which have noted some
signs Of improving business, found
themselves suddenly confronted with
this contraction in credit, and substan-
TALLY & per cent rate. affecting both
themselves and their customers. the con-
verters. and the large Western Jobbers-
Extreme Conservatism InIPeIled-
What fmpels this extreme conser-
vatism does not appear clear. II nat
uraIIy occasions some Uueasiness, as is
ever the case wien merchants cannot
ascertain the rea sons for a contraction
OF credits. How -0lg a condition Of this
kind can continue without some mOdifi-
cation. II is difficult 70 say, but so long
as the banks hold aIoof from the com
merciaI paper market. the action IS Ger
tain TO force conservatism upon the
mercantile interests, and Il continued
for any length OF time Il can have no
other efec- than TO accentuate CONNER
ciaI contraction
The operation goes very Far N eX-
planning the anomaly OF expanding bank
cIearances throughout the country coin
cident with contracting clearances at
New York. the commercial and financial
center. During the present week, for
instance the cIca-anCeS OF all leading
cities of the cOun-=- show an aggregate
OF s-s5l5s555,l5l. 2 8os Of go per cent COM
pared with last year This Is due entire
IL 10 the diminished exchange OF New
York. for outside this center the gross
clearance Of the country show q gain
OF 30 per cenf over 1903
Difficult as Z has become for the
mercantile OmTunlty 10 obtain accom-
mediation. Il Is even harder for the cor
pOratlOn- In case Cf necessity the rail-
ways can sell well secured lort term
notes, If the prize and InJers 81 rate Is
made sufficiently attractive, but indus
trial corporations, according to bankers
are in very much the same position now
that they were in 1876. when they found
Il almost impossible 20 secure funds.
This is illustrated by the case OF the
Industrial enterprise referred to, where
the necessary money was obtained
through a sale Of the owner stock
News developments in Wall street
were OF a mixed variety, but, as al
ready indicated, news txerted very lit
tie influence IN the speculative market
were clearly OF a professional nature,
and were conducted with little or no
attention to news.
The success Of the radical wing Of
the Republican party IN Kansas and
Iowa passed without comment, as did
the evidence Of further contraction in I
the iron and steel industry
The late improvement IN stocks. and !
the generally strong uudertOne of the
market, was attributed 20 better ad- 4
vices concerning the corn CROP pros
poets, but the advancing tendency Of 4
he commodity markets seemed rather 4
,leaTly TO forecast a Government crop I
report tomorrow showing further /
deterioration in spring wheat, and prob
ably an estimate on cJrn somewhat /
inder the July figures OF 3IIAG00 4
bushels. In connection with corn, how /
sver Il Is well to bsar In minj that the .
srOp almost always shows deteriora- /
ion from the first estimate.
This year corn could suStEt in an
rom the prelimiuaT, estimate, and still
-eturn q harvest substantially as large /
Is last years abundant croL
The Government cotton report, made
public on TUESDAY. was Disappointing.
showing a condition Of Us or the I
Owest with but two exceptions, 1907
md 1909 at this season in twenty years
IOWeTer. this was a Irfffe better than
he trade predictions Of a condition of /
8 and it indicates a harvest Of about D
, 600 600 bales. with the prospect Of i'm
,rOvement arising out of timely rains I.
n Texas and Oklahoma n
Gold Imports and Exchange u
The unexpected poor statement OF the
bank Of England on Thursday. showing II
loss Of nearly SS,z50.Oo0 in gold hold
ngs, due largely 10 the American move
nent. has been followed by sharp ad-
-ance in London discounts, and a cor
espsndingly sharp recovery in sterling
at New York. all Of which
,oints to increasing difficulty in obtain
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