The sun. [volume] (New York [N.Y.]) 1833-1916, 1899-10-09
ponrsr MONEY MARKET.

49, carly days Of last week. indicates clearly
~. ,,undness OF financial conditions not only
y, mis- centre but elsewhere In the commercial
Grid The volume OF dealings was. indeed
r,Juoed, and n few operators. with stocks OF
dorbtiul value bought on credit were obliged
% nav an excessively high price for temporary
,,dulcence. in order to avert greater losses.
but what was said In this column a fortnight
,ro-that tho mercantile community had not
then sufyersd any Inconvenience from a curtail-
msut Of accommo datons-ls stIll true; nor
have there been any ymptoms OF panic In
the country generally. The pinch here has
hesn produced by a comb ination OF local cir
cumstances which are fast ceasng to exist.
Our New York money market has had to con-
tsnd, for several weeks past against n contrac-
tIon NJ loans by banks forced by the withdrawal
o,their lawful money reserves to meet the GUS
tonnry harvest-time demands OF the aRricul-
,rr,l districts This contraction has been
rpch more severe than It would have been had
hank officers exercised more prudence in max
ING loan. last spring. They encouraged bor-
rowing then to an excessive degree. and now
that they are compelled to rspress IL the re-
s,riction seems correspondingly severe. To
this cause Of strngency was added last Mon
day the necessity OF providing for the large In
,arsst and dividend disbursements which fell
due' that day and for the payment OF several
millions nt dollars OF city taxes thon first pay
able News also came on Tuesday OF rise In
The Bank OF Englands rate OF discount. FOL
lowed by another on Thursday. and the threat
.ned outbreak Of hostilities between the Brit
,sh and the Beers became moro imminent.
On the Continent Of Europe the money mar
hot has been stringent for year or longer.
Paris has been disturbed by tho Dreyfus affair
and by the Vaccinations OF revolutlonsts hos
Tile to the present republic. In Berlin. trouble
made hy excessive speculations In industrial
er,errriscs has kept interest at high rates.
and threatens to make them higher still In
Vienna there has been financial alarm due to
the conflict between Austria and Hungary and
betvesn Semites and anti Semites. Italy and
epaIn have remained in their chronic state OF
bankruptcy. and Russia, Notwithstanding the
immense store OF gold she has accumulated in
her Treasury. Is seeking to borrow money for
building more warships and for the completion
OF the Trans-slberian railway. Nevertheless.
Furope has suffered no panic. and that we
have ESCAPED one demonstrates the possession
nv us OF a financial strength. upon which we
have good reason to congratulate ourselves.
It will be observed. too. that aside from
special stocks affected by special causes. the
decline in our stock market produced by a
~
comparatively unImportant. and has been. in
some cases accompanied by decided rise.
The Franchise Tax act IL responsible for the
fall in Metropolitan Street Railway. Brooklyn
Rapid Transit. and other similar stocks: the
war between the gas companies sufficiently
accounts for tho lower market prices OF their
shares and the fall in the many industrials.
which have been brought out during the last
twelve months IL easily explained both by
their immense capitals and by the uncertainty
oithe dividends upon them. How much this
uncertainty affects prices Ia evident from the
quotations at par or thereabouts OF the best
industrial preferred stocks. promising q. 7 and
Sper cent. while flrst-class railroad bonds and
guaranteed stocks yielding 81 and per cent.
bring large premiums.
It Is unfortunate. indeed. that so many OF
our citizens. in their haste to get rich. buy not
only stockr. but wheat. cotton. pork. iron and
other commodities. with borrowed money.
trusting to a rise In the prices Of their pur-
chases to yield them a profit. This practice
has a powerful influence both in creating de-
mand for credits and in keeping prices above
the level at which they would stand II they were
left TO be governed by the demand for actual
investment and consumption alone. 1t Is true
that buyers for a rise have to contend with
sellers who gamble upon future fall. and but
for this counteraoting force the evil would be
much greater than 1t il. but it is still great
enough to contribute to the financial situation
an element OF weakness. and to make fore
cast Of its future difficult.
Thsre was once time when the fallacy pre-
Vailel almost universally that tho prosperity
OF a country is measured BY the quantity OF
gold and silver 1t possesses; and statesmen.
with the approval OF the most intelligent citi-
GEMS enacted laws for the encouragement OF
the Importation OF the precious metals and for
the prevention Of their export. That fallacy
has long since been exploded. but to it has
succeeded similar one. which finds numer-
Gus advocates. namely. that high prices oil
stocks and Of merchandise are an index oil
prosperity and low prices the reverse. The fac,
is considered that when every man gets a
high price for his labor or the fruits OF It,
every man must also pay q high price fol
the commodities he does not himself
produce. or for the services he must hire
others to render him. and that thus high
prices are not necessarily more profitable
10 him than low ones. The mass OF people
are consequently. pleased whom prices rise
an made uncom Portable when they fall. The
strength OF the free silver cause lies In thi,
popularity OF the human mind. Seeing thai
under the gold standard prices were low
whereas In silver countries they were high
millions OF our citizens were lately eager L
nave gold supplanted by silver In this countr!
also, Now that under the gold standard prcei
have risen. the fever for silver has abated. bu
Ills still strong enough to induce the Demo
cratic party to stick to its advocacy OF free sill
yer coinage. 80. too. fall In the stock marke
10 deprecated even by those who are not com
PEELED to sell. and rise produces citation ever
among those who do not directly profit by it.
Notths prices OF com m ODDITIES. but their q bun
uahce. and the liberality with which they ar
distributed among consumers. constitute pros
perlty country in which the greater part Q
inc Inhabitants are idle. as they are in some O
the West India Islands. or where. as In France
lust before the Revolution. the fruits OF thel
Toll are condscated by unjust taxation
cannot be said to be prosperous No
country truly prosperous whic
consumes the total product OF its In
austry leaving no surplus to add to its CAPT
TAI 1t may. by borrowing abroad. obi ain tn
means for charging its industries. and thu
ior a time make show OF increasing wealth
uut the process cannot 20 on forever: and whc
comes to an end. and lenders demand re
PAYMENT. revulson occurs which leave