The Washington times., 1912-04-07

Is, the amount OF money loaned by New
york to Germany and elsewhere in
possible that there is some "kink" in
the manner of carrying such loans in
banks reports which Is different than
In carrying domestic loan, but it
would seem that a bank loan is a bank
loan and nothing else. and that II Js a
transaction which locks up the funds
of an institution, whether Il be made
to a New York dealer or to German
by the weekly bank statements is not
truly representative of the position of
the clearing house institutions as to
their loans, deposits, cash holdings. and
reserves then It would seem that there
is work indeed for the Money trust
investigators, for II Is clear that an en-
tire banking position may be falsified
through some special method Of report
ing Foreign loans.
Deficit Made Good.
In consequence of last weeks deficit
today's bank statement of course, was
awaited with much interest. 1t was
expected that the reserves would be
made good, but how this would be ac-
complished was a matter for much dis
cusslon. When the statement was pub
lished 1t became apparent that the work
was done by an extensive shifting of
done apparently to transfer these items
from clearing house banks to non
member institutions, either local or out
of town. Thus the returns of ''all men,
bcrs." banks and trust companies to-
gether, purporting to give actual con-
ditions," showed a reduction of $26,5lO,-
600 in loans, a curtailment of $32, 17S, 900
In deposits and a loss of Ss722.OOo in
cash holdings. BY this process Of re-
ducinR liabilities the requirements of
reserve were correspondlngly reduced,
and, In consequence, there appeared TO
be an increase in reserve of 81, AS, 900,
but, of course, this was due solely to
the shifting of liabilities and the reduc-
ton of actual requirements.
That such was the process Is dis
closed by an examination of what is
known as the "non-member" statement,
that Is, the report of State banks ana
trust companies which are not members
of the clearing house. This shows an
$l1,f4,600 in deposits. Thus we have
the spectacle of one group of local in
stitutions reporting to the clearing
house, whose operations are taken as
loans and deposits in order to bring
the reserves up to the legal limit of
% per cent. while another local group
of similar institutions. doing precisely
the same kind of business, but not
clearing house members, have expanded
their loans and deposits and have re-
duced their reserves to 1871 per cent.
One may well ask what is the purpose
of this shifting OF accounts. and what is
the precise money position Of the New
York financial Institutions, and the
thought also suggests itself. how comes
II that with depleted reserves and a
heavy alleged calling of loans. there is
no liquidation In the stock market and
prices advance?
Money Rates and Bull Market.
Naturally the bank reserves of the
local clearing house institutions are re
stored" both according to the average
and the actual statements of the report
ing members, but In doing so the cash
holdings under the average returns
have been reduced within the week no
less than sl1 1852 OOO and under the actual
returns $6,722,0 900. 1t may be said that
against the deficit of $2ll, 900 a week ago
there is now, in the same report-that
is, the actual condition of the banks
alone-a surplus of s1,l45,25o. but this
does not tell the whole story. OF
course, the bank statements as now
made up in New York are highly con-
fusing, and 1t requires careful