The Business Week [excerpt]

THE MONEY POSITION.

THE supply of money is plentiful, and even on Stock Exchange pay-day this week loans for the day did not command more than 1¾ per cent., and the usual rate has been 1 per cent. to 1½ per cent. There has, however, been somewhat less disposition to discount in consequence of the attack upon the President of the United States and the fear lest the deplorable event should cause bankers to take steps to strengthen their cash position by securing gold from London. The absence of complications in Mr. McKinley’s condition until to-day has somewhat allayed the fear that gold shipments would [465][466] shortly occur. But the unfavourable turn taken by the illness to-day has revived the apprehension of the probability of early gold exports, and has made buyers of bills less anxious to purchase. Hence it has not been possible to place three months’ bills to-day at under 2³/8 per cent., or six months’ at under 3 per cent. On the other hand, holders of bills have preferred to wait for further developments before parting with their bills at these rates. There has consequently been but little business. That a considerable amount of gold will shortly be shipped to the States is now generally expected. Indeed, the further fall in the American exchange of this week to 4.85¾ for cable transfers and to 4.85¼ for sight drafts, with the value of money in New York at nearly 6 per cent. as compared with 1 per cent. to 1½ per cent. here, means that gold shipments are now almost, if not quite, profitable. In view of the inquiries as to the price at which it is disposed to sell Eagles, the Bank of England has raised its selling price for these coins to 76s. 9d. It may be taken for granted, however, that if the States mean to import gold, the advance of a farthing will not prevent shipments, and at the moment all the indications point to the necessity of New York securing gold from Europe. It may be taken for granted that so conservative a body as the bankers of New York would not have appealed to the Secretary of the Treasury to take exceptional measures to release money from the Treasury unless the funds were badly needed. The Secretary of the Treasury has, of course, responded to the request, but it is considered improbable that the measures taken by the Treasury will alone be sufficient to place the banks in a satisfactory position. Moreover, there is at present no serious reason why New York should not draw upon Europe for gold.