The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-09-13

OIL our banking OBSERVATION-DISCLOSURES
that general prices are now fully 10 per
cent lower than they were at that period
Further evidence of the large expansion Of
business is afforded by the loans and dis
counts of the New York city banks. For
the week ending Sept. 4, this item stood at
$685., 100000, which-as will appear from the
following statement of the maximum of
loans in the fall months since Isis the
highest sum reached at that season Of the
last ten years:
1o5l-oepL. .$069, 3OO, OOO
!osO-Ocl. 90o,lUO OOu
1Sa5-Sept. 5zz, lUO,U UO
1S54-Oct oOO, 3UO, OOO
1oS3-SepL- 4UU,zUU,U wv
1cSz-0epl 4oI ,1VU,UVU
1S91-Sept. 4Oo,0JO,ovO
1S9V-Oct III. OBSERVATION-DISCLOSURES. 4Oo,oVV, UOJ
1oo9-SepL 4JS, ,OJU
looo-Oct' oSo''UV'VUO
THE city banks are now lending IA per
cent more than the highest volume ever
attained in the hosiery of their operations.
This is incontestable proof that the amount
of current business transactions exceeds all
precedent. 1t is true that we now have
about IL, 100000 more population than We
had in lSS0-the period OF highest previous
maximum of loans-but against that fact
must be set Oft the great tail in all values
that has occurred since that date.
NO MANUFACTURED BOOM.
This sudden expansion to a coalition of
speculation. 1t is in response to bona fide
wants, and shows none of the dubious ele-
ments of a mere manufactured boom The
fact that such measure of recovery has
come within the short period of three or
four months is a very satisfactory sign of
the sound financial condition of men of
business. 1t means that the weak elements
of credit have been weeded out during the
nd hat have
their finances in sound shape for meeting
the requirements Of a period of large COM
mercial expansion.
What may be the magnitude of those
requirements is inferable from the extent
to which the satisfaction of a wide range
of wants has been postponed during the
last four years. In every branch of produc-
ton, excepting those most essential to sub
sistence, this process of postponement has
been in force. In buildings, in the home
and it's furnishings, in the wardrobe, in
our factories and in the construction and
maintenance of railroads, this avoidance
| of expenditures has been rlgldly enforced.
| Four years of this sort of economizing is
| probably about equal to the citizens total
| expenditures of one year; and that year s
| measure of abstenton from the supply Of
reasonable wants has now to be made good.
! 1t is one thing that there should be such
an important pressure for an extra sup
| plying OF wants. it is another that the bust
ness thus created should be done at fair
rate of profit. OF this there is no reason
| able cause for doubt. The downward ten
dency of prices has been arrested; surplus
| stocks are being fast cleared off, and in all
| directions consumption is gaining on pro-
duction At last, therefore, we seem to be
| in a fair way towards remedying the great
excess of supply over consumption which
| has, for several years past, been forcing
| the great fall in prices and the extreme
| depression in business. We have in fact.
reached a new starting point upon a lower
| basis of costs of production and of prices to
| consumers; which means broader produce
| ton and the capacity for a larger con-
| sumption per head of population than We
|
the new wants arising from an increase
of 10,0OG0e0 in our population since the be-
have been steadily forcing the readjust-
ment which we now see in full operation.
| They explain the great revival and justify
| it by making the movement natural and
! permanent
TELL THEIR OWN STORY.
'It is this process which constitutes nine
tenths of the cause of the current remark
able recovery in the market for securities.
| Other minor causes, chiefly of a political
nature, there have been; but they would
| have produced little visible effect without
this radical reconstruction in the conditions
| of production and distribution, of supply
| and demand, in the commercial markets.
The people find no difficulty in comprehend
ing the meaning Of these new elements in
the situation; the factors tell their own
story to every common-sense observer; they
explain to eyerybody's satisfaction the
basis of the propheSyingS of better times.
1t is this clear comprehension Of sound
and natural reasons for expecting an era of
renewed national prosperity which explains
and JuStlf1eS the present Sanguine feeling
on the Stock Exchange. These conditions
have made speculation inevitable, because
herent value tbev had lost Within the last
four years of decline. Thus the market
needs none of the arts of professional ma
nipulation to put up prices Values rise be-
is increased, and because that increase is
seen to be of a bona tide and permanent
nature. If prices Go not advance at once to
an extent commensurate with the import
ance of the causes affecting them, it is be-
cause OF the great oreaath ana diversity
provement. Prices can be raised only by
passing through market process of deal
ings: Those exchanges have to be repeated
indefinitely to produce that effect and when
the stock of issues on the market is end
lessly varied and enormous in amount the
mechanism of finance can accomplish the
task only by a process of slow detail and
by constantly changing operations from one
set of issues to another. This must account
for the seeming slowness of prices in adj
vancing to a parity with the improved con-
ditions affecting values. and this it is which
affords opportunities for bear manipula-
lions and frequent realiZings. But, through
all these oscillations, market values must
continue to advance; and it may quite pos
sbly take several months before they have
reached point at which conservative men
will deem il prudent to pause
London still hangs on the skirt of our
stock market being alternately buyer and
seller. The Bank of England appears to be
using its. utmost influence against pur-
chases of securities which might bring
some of it's gold to New York. on Thurs
day it refrained from advancing its rate Of
discount; which is evidence that its expos
ure to losing gold is at least not becoming
more aggravated. 1t is, however, by no
means improbable that 1t may put up it's
rate at a later stage: for our exchange
market is in such a position that the ar
rival of few millions more of cotton bills,
in addition to the large amount being made
against large shipments of cereals, might
produce imports of gold 1t remains to be
seen, however. whether the relative rates
for money at New York and London might
not cause export bills to be bought up here
as when exchange was largely in our favor
last year; in which case, imports of gold
might be more or less postponed. America
is long of crops and short of troubles,
whereas Europe is short of crops and long