The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1899-10-06
TIGHT MONEY MARKET.

The tight money market in the
Eastern States has knocked down the
price of stocks on the Exchanges. This
is the first natural check to undue
speculation. The banks provide firstly
for the demands of legitimate business,
and take care that these demands are
supplied. Bankers in these later days
realize the importance of keeping re-
gular and legitimate business sup
piled with money. The surplus funds
are loaned to the stock brokers and
spectators. When speculation reaches
a point where the money lenders fear
that panics may occur, and securities
against speculative stocks. Excepting
in times of actual panic, money is al
ways "easy" with good collaterals as
a margin, such as government and
State and railway bonds. Legitimate
business banks on commercial commo-
dities.
As soon, however, as the sale of
commodities becomes slow and the Sc
cnrity which they furnish is doubtful,
then legitimate trade, OVERRIDING itself,
finds also a tight" money market.
The Eastern money centers have
reached that stage, in. the extraordin-
ry activity of business at the present
time. when the money lenders ask, is
there not imitation, and are the values
OF commodities stable? Commercial
history is repeating itself
1t appears to be impossible for trade
to maintain an even course. 1t swings
like pendulum from the extreme of
depression to the other extreme of in
flation. 1t refuses to oscillate around
the medium point. The nation, like a
man who cannot control his appetite,
first stuffs and then starves. First.
overproduction, then underproduction.
Then a surfeit OF them. Iron sells in
Alabama for 5000 per ton for severai
years. Now it rises to $500 per ton.
At once every dead iron furnace in the
country is in operation, and in a year
or so, more iron will be produced than
can be consumed. The business inter
ests like a hungry man, clamor for
more iron, and pay such prices for it,
that it now pays to light up out of
date furnaces.
A few years ago, one of the shoe
manufacturers of Lynn, Mass. testified
before a Congressional committee that
three-fifths of the shoe factories of
New England could supply the eoun-
try with shoes. The manufacturing
facilities increase faster than the de-
mand for shoes. Today, these factories
cannot fill their orders. So new fac
tories are built by the inexperienced.
The market is finally glutted, and the
factories shorten the time of the la
borers.
The banking interest is always con-
servative, and it sees with apprehen-
sion these sudden rises in prices, and
begins to discriminate. The shaky
concerns then complain of tight
money" There may be unusually
eight money in the stock market,
while legitimate business gets all OF
the accommodation it desires at moder-
ate rates.
The banking men, and the trust COM
ranies of the present day, have learn
cd at an enormous cost that there is
a wide difference between prosperity
and imitation. 1t is not easy to draw
the line between these two conditions
A costly experience during the last
thirty years has taught the younger
men who control the money markets
that economic laws must be enforced
entering schemes for money-making
which, twenty-five years ago, would
have secured the aid of these men, are
INV instantly rejected. and are left tt