Arizona republican. [volume] (Phoenix, Ariz.) 1890-1930, 1899-09-22
A Premature Gale Sweeping
Along Wal Street.
UNEXPECTED CONDITIONS
= Situation which Calls for Caution
But Does not Warrant Alarm.
y 10 viii at Least Check Certain
UEWhoieSome Tendencies. An
Hcmenf of Uncertainty Re-
moved.

New Yck'~SfDt. 21.-(Special.)-
Wall Street seems to be passing
! through a somewhat prema,--re eoui-
: nccs1al gale. Trained observers 1-ave
seen the signs of it's coming and have
nrudently he'd in their sail; but to the
nSa;@r:ty the storm has been unexpec.-
| ed, and hey are taken unawares.
The eleme-s>s of disturbance ars few
and simple, but they are not easily
controlled by ordinary trimming tao
ties. Finance has Encountered for
eign obstacles of Indifference. The
African question has lost none CT its
acuteness and may, at any moment,
become an element Of serious distur-.
bance at the worlds chief mc-cy cen
ter. We cannot be certain that any
thing now remains to our credit of the
large balance arising from our extra
ordinary surplus Of exports over i'm
ports; on the contrary, thsre are in
dications that the return of our Sc
curities has about liquidated that bal
ance, and we have for some time been
/ closely verging upon the possibility
/ of an outflow CT gold to Europe.
/ Whilst these external possibilities
confront us, the condition CT the hcm,s
market is not assuring. The extra
, ordinary revival of business has
caused a corresponding expansion Of
bank leans, and has at this same time
( increased the demand for currency in
the retail circulation. With a banking
system that indirectly compels the
banks to augment their stccks Of law
full money in proportion as they ex-
tend their loans, we are brought face
to face with an acute scarcity in the
circulating medium. The universal
employment CT the working classes at
rising wages, the increased holdings Of
cash among country rstailes, and the
rapid rise in the pstces of goods, have
cCnjointly produced necessity fer an
expansion Of the volume Of money;
and this need makes itsslf felt at the
moment when the banks of the inter
ior are drawing their deposits from the
metropolitan banks in order to facili-
tate the marketing OF large crops of
cotton and cereals. Unfortunately,
we have no effective resource for in
creasing the amount of the money
circulation in order to satisfy these
necessities; and the result appears in
a reduction of the cash reserves of the
New York banks to close upon the
dead lina,'' at a point about midway
in the usual fall eff1ux of money to the
agricultural sections.
This is not a promising situation.
Unexpectedly, we are brought tc
condition of things in which the ma
tional prosperity threatens to be ssr-
iously crippled through the legal re-
straints upon our banks and by the
inelastfcity of our currency arrange
ments Had our laws relating to
note circulation BEEN such as TO admit
CT an expansion of bank issues p-cpoT-
toned to the wants of the crop move
ment, there need have been nona OF
the draining of the lawful money re-
serves of the metropolitan banks
which is now in process; and the COM
pulsory contraction cf leans, and the
in money and the exhaus-
ton of the reserves would have been
easily avoidable. At its coming ses-
sion congress may find reason enough
in the present situation for far more
thorough measures CT currency and
banking reform than appear to be en-
Lertained by members claiming to ba
leaders in financial reconstruction
What, however, most concerns Wall
Street at the moment is not SO much
hat we are confronting theoretically
faulty system of finance as that we
stand face to face with a delicate and I
lificult financial situation. Two mill
ions of surplus reserve and eight to
nine per cent for call leans at the
middle of September are ugly and
facts. The situation comes
80 near to a deadlock that there must
De some yielding somewhere in order
% avert very unwelcome conditions.
It would be indulging in a frail hope
o expect effectual relief from impor ta-
ions of gold The situation OF the
oreign exchanges hardly suggests
uch a probability. A fall in the prize
If securities, or cotton, or cereals -
night so stimulate exports as to bring
Exchange to the gold importing point;
,ut who would desire to see gold pro-
ured at such cost and relief could
lot come from such a source until 1t
vas too late to he of much service.