The Washington times., 1912-09-01

try's industries, the railways. In the
statements which came to hand, was
the evidence for which they have been
looking, but the efforts OF the profess
sionals to bid up the market thereon
were virtually a failure. Prices ad-
vanced on moderate short covering but
they sagged again after this was COM
pleted, for no disposition to follow UP the
Improvement was manifested by out
siders.
Naturally the impending holidays
were blamed in large part for this un-
satisfactory response to the good news,
but there is better ground for the be-
lief that the combined influences OF
political uncertainty and the develop
ments In the money market imposed
greater restraints. From the banking
point of view Developments in both par
ticulars took an unfavorable turn. First
ministrative circles In Washington, con-
cerning the armed invasion of Mica
ragua and the later resembling of that
act; then there were the suggestions
of radicalisfn in the utterances of the
Democratic Presidential and Vice Presi-
dental candidates, and finally the Wig
orous campaigning in Vermont was not
quieting to the Wall Street nerves.
Tension In the Money Market.
prominence during the interval and II
is not too much to say that it became
the dominating influence of both the
domestic and international situation.
1t is possible that Wall Street is max
ing too much of these developments.
for It should be recalled that Septem-
ber LIST Is quarter days" abroad and
to some extent In this country, and that
tu 81 nd
for interest and dividends were accen-
tuated somewhat by the triple holiday.
making a rather unusual demand for
Wall Street accommodation. AS a result
call money ran up to 3h per cent on
Friday. and 1t ruled during the
week at from q to " per cent
higher than in the preceding interval,
while time money advanced from n to
Y per cent for short maturities, sixty
and ninety days and four months. and
from y TO u for five and six months.
These it must be acknowledged are
rather sharp advances for time funds
and they carried rates to 4 and ~ per
cent for sixty days, AZ per cent for
ninety days. ~ to s per cent for four
months. and 5 to 81 per cent for loans
carry ing over the year. A correspond
ing advance of about u per cent re-
chief characteristic of that de;
partment was the very much curtailed
buying OF paper by local institutions:
This shows a disposition on the part Of
banks to keep themselvestliquid in or
der to accommodate their dealers. In
fact there was every indication that
banks and trust companies are looking
for an unusual demand for money dur
ing the balance of the year. This was
manifested in many ways. not the least
interesting being an advance OF " IN
United States 2 per cent bonds. due to
buying by national banks, for the pur-
pose of taking out additional circula-
ton.
The European and Canadian Situation.
Quite naturally the monetary tension
was accentuated by the action OF the
, Bank of England in making the unusual
| advance OF per cent in its minimum
discount rate, from to per cent, es-
| tablishing the highest official rate at
this season in very many years. with
the single exception Of 1907, when for
| similar reason the effort of American
and foreign bankers to borrow exten-
sive,y in London the discount rate was
advanced to ~ per cent. The fact that
| the governors of the Bank of England
announced that discounts were advanced
| as a protective measure and that the
rate was moved UP full per cent IN,
stead of a half per cent, which Is usuai
| in changes in the official discount, gave
| greater Significance to the development
| than 1t otherwise would possess. II
will unaue stionably force material
| advance in the official German discount
rate and probably in those OF other
European countries. particularly Aus
! tria, which is accounted a weak spot:
| 1t Is now recognized in banking circles
that Canada is likely to play an import
i aYft In, he money
ket' The rapid growth of the Dominion
| in the last decade and the tremendous
| Industrial development of the past three
years has created monetary problems
| there quite similar to our own, parucu
Ilarly in respect to the demand for money
| for crop moving purposes. According tc
the July reports, the Canadian banks