Show TOO MUCH MONEY IS NOW FEARED Period of Inflation Always Fol Follows Follows Follows lows a Crisis and Bankers Anxiously Await Future CERTIFICATES A HINDRANCE GOLD WILL BE DRIVEN BACK TO EUROPE New York Tork Dec 1 It Is significant of o otho tho the change in financial opinion that mos most of or the discussion among financial men last l st week dealt with the feet o oa of ofa a state of ot Inflation of or the currency into which It was feared the country might emerge with the passing of the effects o or of irrational distrust The bringing forward of this subject into debate while the pro pre premium on currency was still being paid pah and other active measures for relief relict o othe of the currency famine being pursued was due duo to t the plain lesson of experience it In past crises of a similar kind In all o of these the first return of confidence and the reestablishment of credit have brought a condition of actual redundancy of the money market a heavy accumulation tion of ot banking reserves and a free ex ax export export port movement of gold Return Flow of Gold While the enormous mass of gold that tha has flowed to the United in re response response to the urgent requirements de do developed developed by the crisis is admittedly In ex ox excess excess cess ot of the normal requirements of the coming period the return flow of gold golc goldis ii is bound to have an unfavorable effect on cn financial sentiment and In the event oi of Its undue stimulation by any Inflation of ol paper note Issues which would tend to force out gold the danger of ot a check be being beIng being ing administered to the recovery In corn com commercial mercial activity is taken anxious account of The decision of the United States treasury department to limit the allot allotments allotments allotments ments of 3 per cent treasury notes and to accept no more bids for them was the outcome of this new phase of ot the situa situation situation tion which the turn toward normal eon con conditions das developed The opinion of ot the treasury department that nt the secretary may ma call In these certificates before their period has expired and so pro provide provide provide vide for tor the tho of all bank notes issued against them offers another resource for tor contraction in the event of any symptom of Inflation Trust Company Reserves In another direction it is hoped to find permanent and substantial employment for a large amount of ot gold that has Been n rushed to the United States The com corn commission commission mission appointed by Governor Hughes to consider changes In the New York state banking laws Is enjoined to report con conclusions conclusIons cl by hy the of December While the exact terms to be expected of the recommendations of this committee can cannot cannot cannot not be foreseen It Is taken for tor granted tha tim will include drastic reform in inthe Inthe Inthe the requirements upon the thO trust compa companies companies companies nies for tor holding cash reserves The re recent recent recent cent crisis has demonstrated the made Inadequacy i of ot present reserve requirements for or trust companies doing an active banking business which most of them i do The 5 per cent of cash to be held in their own vaults under the present law therefore Is likely to be changed to a substantially substantial higher figure some advocates cates ates tes favoring the full 23 5 per cent now exacted of members of ot the clearing house hous It t is pointed out also that a n more favor favorable favorable favorable able moment for effecting this reform could hardly be chosen than the tha period now believed to be approaching when the heavy Inflow of ot gold will be found superfluous for tor the diminished needs of ot the circulation and will tend to flow out again Way Opened for Resumption The engagement of nearly nearl of ot gold old for Import of which approximately has been received the deposit with the national banks of about 60 I 00 of government funds and the issue of new bank notes to the amount of about WOO have met the present require requirement meats ment and opened the way way to the resumption lon tion ton of or cash payments by b the banks now clearly cearly at hand band The disappearance of c the premium on currency which by byal al statement of terms is a discount on bank checks will wl herald the restora restoration restoration tion to use of many man Instruments of cred credit cre It t which share in some lome of the functions as an money and of ot which the driving out of ot use forced the extraordinary demand for actual cash ch Time Will Wi Tell Tel the Tale TaleThe TaleThe TaleThe The reestablishment of credit Is ex cx expected expected to lead Iud to a n prompt resumption of ot exchange operations between th the differ different ent ant money centers center in this country the dislocation of ot which has formed ormed the most mos serious embarrassment to the conduct of ot commercial operations The check which the embarrassments have hae caused to busi busl will be removed at an nn early day and to that extent leave the way open for prompt recovery recover There remains the question of the resumption of various forms for of activity which were absorbing large arge amounts of ot capital before the crisis developed and the distrust of ot which was he tIme vital vial impelling cause of oC the crisis Many such enterprises take on an ap appearance appearance from the present point pint of view of at extravagance and lack of adjustment to possible expectations The course coure of events event must be awaited to define derne how far capital was unprofitably sunk In such enterprises enterprise before the march of progress Is a taken up again agin where it I was wa halted hale ness so far tar as they are themselves con |