The herald., 1898-07-17
The Financial Situation

lie luduCldl S1CuQClOu
A summary of the financial situation as
1t is viewed in the New York Times of the
10th inst. is both interesting and instructive.
The writer says.
wall street has ceased worrying over
war dangers. the conviction having become
Hrmly settled that only success can hence
forth attend our arms. In calculations
among financial men of consequence the
only uncertainty as to the war seems to
be as to precisely when hostiities Will end,
and what sort of a settlement Spain Will
be permitted TO make.
Once peace Is re-established. natural
activity will be found for all the funds now
idle-ahd this idlenesse of funds has for
long time been chief among the factors Civ
Ing opportunities for stock exchange bear
ishness. Banks are overlooking with de-
posts, and bankers are troubled in finding
profitable employment for SURPRISES which
weekly pile higher and higher. When war
was merely a threat, there was nervous
ness, a scare, and boarding, rates for the
use of ready money mounting savagely.
With actual war under way. they who were
unwilling to lend because they were nerv-
Gus are now nervous because they find il
Improbable to lend.
Popular theories have it that this situa-
ton reflects widespread business letharey
But does it? The fact is that money is in
demand, Is active Is employed in i0lustrial
and commercial quarters beyond what have
been past years records. Much moaning
heard In Wall street may be taken o signi-
fly that money cannot anywhere in bust
ness be satisfactorily employed. Yet how
significantly different is the showing that
actual facts make. Take the exhibit of the
banks of New York, as issued by the
Clearing House association at noon yester-
day, and therein is found complete dispo-
sition of the notion that business men are
hot lass 49,,
busy. Clearing house banks in New York
are now lending $633 100000. This aggregate
mounts millions on millions beyond high
est past records. This time last year the
item of total loans was 1898 900 600, round
oO0OO,C0O less than the figures now are.
Five years ago the sum was s41S 900, O00 and
ten years ago $3.50, 900 900. If business leth-
argy or business contraction or business
nervousness be in this record, the disguise
Of it is high art.
Ample explanations there are for the
deuge of ready money. We are finally
realizing the fact that our people are richer
that hitherto we estimated Potency has
been In the fact that ever since the smash
Of the Barings back in 1890 started discom-
future throughout the whole world, the
American people have been devoting them
selves to prudence. The financial demora!-
lzation that knocked down market values
here in 1893 gave emphasis to tendencies
already well developed. 1t became of a
sudden fashionable to be poor. Virtually
everybody got down to hard pan. Strut
ting made way for economy. and ever since.
as a people, we have been crystallizing re-
sources. Business men have competed
with one another in no particular more
than in the exercise of conservatism. Adj
venturous business spirit has been showing
nowhere. Every financial commercial and
industrial interest has aimed at being Sc
cure rather than at a swelling CT profits
And years of liquidation have had revou-
tionary effects.
"One result appears in the fact that
American securities are today more large
" owned outright than ever hitherto;
margin. Security holders are now, beyond
all past records, security owners. Bugaboos
on the stock exchange thus exert relatively
small Influence, for the man who owns
standard shares outright is not to be fright
ened into making those sacrifices which
thinly margined accounts involve. And in
this Is the explanation of that fact which
Wall street is making much of in declaring
that securities have drifted into STRONG
hands, Along with this substitution of
investment for speculation there has been
for four or five years sustained liuuida-
tion upon the part of hosts who have gone
altogether out of securities, choosing 20
convert certificates into cash No ordinary
system of calculation can estimate the eX-
tent to which these factors have contrib
uted in the pilng up of the record break
Ing gut OF money now awaiting employ
ment-and 1t waits but for a signal