The Business Week [excerpt]

THE POSITION IN NEW YORK.

     Although the Secretary of the Treasury has rendered every possible assistance in the Money market, the demand for money this week has continued active, and rates up to 6 per cent. have been paid, and exchange has further declined to 4.84¾ for sight drafts, 4.85¼ for cable transfers, and to 4.82½ for 60-day drafts, while the exchange upon Paris has risen to 5.20. A slight rally in exchange upon London, however, occurred on Wednesday to 4.84⁷/8 for sight drafts and to 4.85³/8 for cable transfers. The rate for 60-days drafts, however, did not move, and to-day these rates have again been quoted. As business throughout the week has been restricted by reason of the universal mourning for President McKinley, we must wait until next week to ascertain the extent of the pressure for money in the States. The position has certainly improved by Mr. Gage’s announcement that he is not only willing to buy 25 million dollars of bonds, and to increase the deposits to the National Banks, but that he will anticipate the October interest on the debt, which has added a good deal of money to the market resources. Still, it should not be overlooked that the existing active demand is in spite of the fact that the Treasury has already set free during the past fortnight something like $15,000,000, and that money is still wanted. Further, it must not be [502][503] overlooked that cash usually continues to flow out from New York to the interior until the beginning of November, and that consequently a great deal more money will be required to enable the banks to meet the outflow without reducing their surplus reserves beneath the legal minimum, and that apparently several millions sterling may have to be taken from Europe to enable them to maintain their legal reserves. Last week the reserves of the banks were reduced by £774,000 in spite of the Treasury disbursements, and had it not been for the assistance of the Treasury much larger reduction would have occurred. The banks, however, succeeded in calling in loans to the extent of £2,576,000, and consequently their deposits were reduced by £3,252,000. Hence the surplus reserves increased £39,000 to £1,423,000. As it is understood that the banks received the money from the Treasury only on Friday last, under their system of averages for the week their reserves last week would not be appreciably benefited. It is hoped that in view of the further disbursements made by the Treasury this week, the position of the banks will to-morrow show a material improvement. It should, however, not be overlooked that the Bank has still to meet a very large outflow, and that, even if to-morrow’s return shows a marked improvement upon those of the past two weeks, the probability that gold will have to be taken from this side will remain.