The Washington times., 1911-01-29

benture issue, and 1t Is not likely to
take on an expensive new issue until
tnlngs are somewhat more settled here.
Without doubt the most important de-
velopment in the money market of the
week was the reduction in the discount
rate OF the Bank of England on Thurs
day from ~ to per cent. Though
long deferred, the reduction in the Eng
lish bank rate came as something Of a
surprise when II finally came to the
London market, which is expecting some
further demands on Its gold supplies,
and which has recently been seeking re-
lief by having its commercial bills and
acceptances discounted in Paris. Eng
lish investment issues responded i'm
mediately to the lower rate, but that
market, as whole, made no very de-
clded advance IN consequence OF some
reported unsettlement on the Paris
bourse which halted Improvement.
Money Market Rates.
In the local market, time and call
money and commercial paper ruled
easy, at practically unchanged rates.
The improving conditions of the bond
market, the prospect of a recovery in
business, and the uncertainty as to the
extent of new security issues. are all
receiving attention now in the money
market, to determine, If possible, the fu-
luIe COuI sc Ol IdttS. " men lDc
ity of persons looked for extensive trade
reaction the prediction was current of
very easy money market for the
greater part of the coming year, but
now that there seems a fair prospect
of active financing, and only moder-
ate reaction IN business with the pros
pect Of recovery, a good many money
brokers and bankers are disposed to
revise their opinions. However, nearly
all of them subscribe to the view that
money viii rule easy up to about May.
Probably the feature which has served
more to center attention on the money
market than anything else, is the large
reserve OF 362 per cent maintained by
the National City Bank, which institu-
ton, according to the figures of a week
ago. had deposits of $157, 300 and
specie and legal-tender holdings of
S56,S4O,2O. Such large sum of money
in excess of requirements held by the
big bank quite naturally excites COM
ment, and leads many brokers to con-
lecture as to the purpose. The officers
Of the institution explain II on the score
that it is improbable for them to lend
money on call below per cent and that
rather than loan 1t at that rate they
prefer to keep all funds which they
cannot put out at a more profitable
rate unemployed. Though this expIana-
ton may be the precise situation, specu-
ioliHG w dll SlEttl II always SUSPICIOUS,
and, in consequence, one finds brokers
arguing that the City Bank and its af-
filiated interests. the Standard Oil Com
pany, cannot have full confidence in the
future or much hope Of a favorable de-
Cision. or 1t would not keep so much idle
money on hand.
Bank Statement.
The bank statement of yesterday was
Influenced to a large degree probably by
the city bond sale. Under the statement
of averages, the surplus reserve in
creased g, ,266. 80, while under the show
ing of actual conditions this item de-
creased $1.924,4 $50. This resulted from
the enormous expansion of loans and
deposit liabilities. The actual deposits
increased no less tha" sT7 So, 600, against
an expansion of loans Of $45.! ant
gain of specie and legal tender hold
ings OF l2,54I,20O. Even the statement OF
averages reflected gains of SIS, 900 in
loans and $40, 7S5. 400 in deposits, the cash
gain amounting to Sl3, 463100. This is
very rapid expansion indeed, and though
the surplus reserve is $39, ,365, ,425 above
requirements, as pointed out before, a
large proportion of this is concentrated
in few institutions.