The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-01-25
WEEKLY REVIEW OF
THE MONEY MARKET
Worldwide Ease Uncqualled at
This Season in Several
Years.
ONE NOTE OF DANGER
Record Increase in Loans and
Deposits Here Indicates Ex-
panding Credit.
ONE NOTE OF DANGER

Worldwide reduction Of bank rates In
response to ease In money rates not
equalled at this season for several years
was the feature OF the week. All the
great European banks lowered their OIL
ciAl figures. except the Bank OF France
and the Bank Of the Netherlands. Tho
reductions were fully justihed by the de
cisively strong condition the big state
banks have now attained.
The remarkable ease IN the local mar
k.,. with call money as low IA ~. per
cent and not higher than -. per cent
and with time rates from !. to 4. per
cent below the previous week. was not
even halted 10y the big money operations
In the sale OF sj1. 900, coo state bonds
Despite the ease IN rates there were
features OF the bank statement Yesterday
that were not li,cd, The record hrctk-
ing increases IN loans and deposits. tue
latter showing ;hc unprecedented in
crease In the week of sSj.b3S, 600. bore
signs Of a too rapidly growing credit eN-
pansion. Naturally. much Of the Increase
In loans and the wide changes IN de.
posts were accounted for by the state
bond operations Bankers saw Ia tho
enormous expansion, however, "A dtNClUp.
ing tendency to grant credit
The upward movement ON the Stoc,, Ia
change was undoubtedly responsible fci
Ulucn OF THIS ItnutnCNt IL Wds llt lltE
ment Of strong bankers that the demands
upon the banks as represented in the
weeks statement were proceeding TOO rap
Idly. The ease in money and TIA. strength
ening of bank resources. which az, the e.
sen;ial features IN any well founded lee
covery OF financial. confidence. are endaH-
gered II credit Is to be broadly extended
Immediately moderate Improvement In the
banking situation becomes a fact
IL was rpga -deu I'm banking circles that
undue advantage Is likely 10 be taken Of
the real Improvement in the money sit
ua,ion unless the tendencies illustrated In
yesterdays bank statement are In a meas
ure checked. Though the big bond sale
of the week was taken Into consideration as
the factor chiefly responsible for yesier-
days rather startling figures there was an
evident Interpretation Of the weeks state
ment az being a warning for slower move
ment In acids demanding money
II commercial and stock market de.
mands are TO be reawakened before their
time the worldwide money ease and bank
ing improvement may not be the lasting
thing II has been expected 10 he. In the
opinion of financial men.
The easy rates prevailing IN Europe
remove much OF the possibility % iW-
mediate large calls upon the gold sup
ply here Paris took $4,000. 1000 gold
additional from here during the week.
1t is thought that the Paris demand will
not let up. as the Bank OF France is
not ohly preparing above its needs but
is considered TO be in some measure under
actual strain.
4 significant factor in the home money
market Is the marked reduction rates
for the highest class commercial paper.
Rates went AZ low as per cent, u de-
crease of Y per cent. from the previous
week The supply Of highest class paper
is scant. l; has been in active demand
since the first OF the year The working
OF tho currency Law is seen In this larr,
demand II IL In the outlook that the
currency law offers % properly admin
ls'ered that money interests seq a rca-
sonahlc basis FOR continued ease I'm rates
in this country.
The effect OF the currency law as an In
ternational influence was being studied
with great care by the big London bankers
last week. They We're cautious in their
expires siors. but there was the tendency
ON their part 10 consider the law under
right administration q measure Of rc..c; -
the world money market Tho probability
OF active competition by American banks
in European money markets as the result
OF the law was prominently considered
The Bank OF England showed remark
able strength last week Reduction of It's
rate to Z per cent. from a.! per cent. IS
regarded IN the light OF its condition. as
forecHst.ng a reduction A. az per cent.
this week The proportion OF reserve Of
the bank WAS 57.42 per cent, which has
not been cquall.d since 1886. Gold in
creased by 10000 600. the total gold hold
ings showing an increase Of slS.o0o,ooo
over last year nj this time.
The Bank Of Germany, reducing It's rate
from TO o., per cent, also returned
strong statement. Tho Bank uf France in
creased its gold supply $500. oo0 and de-
creased It's loans and discounts In large
amounts.