New-York tribune., 1911-01-02

December. 1909. has been on an extensive
scale. The selling OF stocks has been ac-
companied by liquidation in commodities,
and az a consequence the general situation
has al last begun to shape itself in the
right way. At the opening OF the year we
had the menace Of the overextension Of
credit which was most pronounced IN the
West where enormous amounts OF money
had been put out on farm mortgages, or,
In other words, unsafe speculation in farm
lands.
The statement OF the Controller OF the
Currency az the opening Of the year
showed a tremendous increase In bank
loans in excess OF deposits, foreign trade
conditions we're moving against this coun-
try, Europe was in a position 10 draw
gold from the United States. which Il did,
and conservative business interests were
alarmed over the general course Of affairs.
including the political agitation which
ended in @ widespread Democratic victory
in November. Fortunately. the Western
banks began TO realize before the close of
the first half Of the year the serious con-
diton OF loans in respect TO deposits, and
before the end Of July they were successful
in bringing about a material contraction
in loans, while in all parts Of the country
tendency toward conservatism in bank
ing developed.
At the moment bank conditions are
sound. particularly so in New York. where
current indications suggest year Of good
business for New York City and through
out the state. The New York State Su-
perintendent Of Banks reports a marked
improvement In the conditions OF the banks
in the last year. These institutions have
not only earned good incomes in the last
two months but they also have been able
TO accumulate large surpluses There is
more conservatism among the bankers and
moro cooperation and greater efforts to
place the banks and trust companies on a
basis that will never permit failure. The
weak concerns are being weeded out In
connection with the banking situation it
is interesting 10 note that in 1910 certain
large savings banks In this city reduced
their interest 10 depositors from 10 3lz
per cent on the sensible argument that the
best interests Of the depositors would be
served by increasing the ratio OF surplus 70
deposits The savings banks are In sound
condition. but the time has come when
the depositor should realize that condi-
tons governing the securities in which
savings banks funds are invested have
changed and that a reduction from 4 per
cent 20 3i2 per cent is wholly in line with
sound banking principles.
Call money rates touched Il per cent in
January. 1910. Since that time, with the ex-
ception OF brief period la April and De-
cember, the tendency OF the market, both
for demand funds and time maturities, was
in the direction of lower levels. extreme
ease prevailing in the last month Of the
year, except in the last few days As a rule
the money market is strong in Decem-
Der, and the comparative weakness Of
rates in this month furnishes one Of the
most interesting incidents Of the none
tary situation in recent years Foreign
exchange also declined in the last month
OF 1910. In the first part OF the year
sterling exchange was strong and upward
OF s50O0J,0o0 in gold was shipped from this
country 70 Europe, while in the last few
months Of 1910 the market declined under
the influence OF heavy exports OF cotton. so
that In recent weeks sight exchange was
near the poin, at which gold could be
brought 10 this country from London. Cot
ton was rushed TO Europe in the last three
months Of 1910 owing 10 the bill OF lading
situation, which. fortunately, was settled
early IN December by the withdrawal by
foreign bankers OF their demand for an
American bank guarantee Of cotton bills.
II is well worth noting that the Interstate
Commerce Commission has made rule
prohibiting the practice OF railroad agents
issuing bills OF lading in advance OF the re-
cept Of goods; also that President Taft has
recommended to Congress the immediate
enactment of law under which one who
in good faith advances money or credit
upon a bill OF lading issued by common
carrier upon an interstate or foreign ship
ment can hold the carrier liable for the
value of the goods described IN the bill al
the valuation specified IN the bill, az least
10 the extent OF the advances made in re-
lance upon IL.
There are a great many people in wall
Street and throughout the country who arc
optimistcally inclined over the course or
business in the new year. owing 10 the re-
marka bic results attained by the farms In
1910. According TO the figures complied by
the Department OF Agriculture the value OF
70 S. .s2s COO,cco OF which corn alone supplied
more than S,50o.Oco0oo. The increase IN
farm products as compared with ten years
ago is about A per cent. II was year OF
new high records In the total production
OF cereals, and the crop of corn, amount
ing 20 more than 3on,0o0oo0 bushels, was
the largest ever gathered by any corn-pro-
ducing country in the history Of the world.
The Weld OF cotton, while under that Of the
: nreceding year, was large in money vaue,
due 10 the high market price OF the staple,
contributing sslo,OO10oo. hay contributing
y720 900 900, wheat s625. 10000 and oats SjSD,-
100000. The country produced 2s,IS,WO
/ bushels Of potatoes, or s per cent above the
average OF the preceding five years. Beet
sugar production was enormous; the To-
bacco crop exceeded a production OF the
nreceding record year OF 1909, and in all
minor crons the record was excellent
| owing however, 10 the decline in prices
,r tbs last half OF the year OF various cere-
| ais the actual farm value OF the cereal
crops declined $3.50 100000 In 1910 from 4s1s
hut this loss was Offset by gain in animal
products amounting 10 upward OF siZ4VVV'-
600. The price Of animal products showed
decline in the latter part OF the year.
EarIy in the season hogs sold at the high
est price since the Civil War, but at the
end of the year quotations were materially
lower.
OF interest 20 business men was the cur
taiiment in the last year OF production In
copper, iron and cotton goods. OverpFoduc-
ton in 1909 in the markets for these prod
ucts led TO drastic reduction in the output
IN 1910. and from present indications further
restrictions In tha output will be neces-
ary before a normal basis in each line can
be established. The high price OF cotton