The Business Week [excerpt]

THE MONEY OUTLOOK.

THE fatal result of the attack upon the President of the United States, after strong hopes of his recovery had been raised last week by his apparent progress, for a time diminished business, but it has otherwise had no effect upon the Money market. The prosperity of the United States has, indeed, become too well grounded, and the stability of the present Government too great, for any serious effect to follow from the deplorable event. Of course, had the assassination been the outcome of a strong feeling of antipathy on the part of a large section of the populace its results might have been [501][502] serious. But as it was the work of a madman, and as the whole of the American nation has been thrown into the deepest grief, no untoward result has or can occur. The monetary pressure in the United States which is being felt at the present time is entirely due to the great prosperity of the country and the active demand for money usual at this time of the year. During the past two or three years we in England have witnessed the effect upon the Money market in the autumn of an active state of trade, and what we experienced is now being felt by the United States, by reason of the active condition of their trade, and the consequent great demand for money. At this time of the year money is always needed to move the crops, the cash outflow from New York usually lasting from the beginning of September till the beginning of November. This movement has now set in, and under ordinary conditions the New York banks would curtail their loans in order to release the money necessary to meet the demand upon them by the country banks. At the moment, however, bankers are somewhat indisposed to call in loans in view of the sad event which has befallen the nation. Hence their appeal to the Secretary of the Treasury to assist the market by the release of idle money locked up in the Treasury, and their desire to secure gold from Europe. It should be noted, however, that they were successful last week in calling in a large amount of loans from their customers without appreciably affecting the market, and that further contractions of the loans may be effected without difficulty, thus setting free a portion of the money required to meet the internal demands—contraction of the loans being always attended by a corresponding diminution in deposits. Further, there is the prospect that the American bankers will receive gold from Europe. We learn that arrangements have been made to ship a million dollars in eagles from Paris by the boat leaving to-morrow, and that although the exchange is not quite low enough to permit of shipments at a profit as a mere exchange transaction at a profit, there can be no doubt that these shipments will be followed by further consignments. Thus by these three methods the banks will have no difficulty in finding the means of meeting the flow of cash from New York into the interior: first, the assistance of the Secretary of the Treasury; second, a contraction in loans; and, third, the import of gold from this side. The second and third operations may indeed be regarded as a portion of one transaction. Bankers will call in loans in New York, and borrowers will doubtless redeem the loans by borrowings on this side, thus increasing the demand for exchange and rendering gold imports profitable.