The sun. [volume] (New York [N.Y.]) 1833-1916, 1902-10-27
THE FTNAN(T4L SITUATION.

of view. namely. that Of legitimate business
and that Of speculation One is incomplete
without IN. other. and each II complement
tary Of the other. Usually. however. the
great mass Of those who speak or think of
financial matters bear In mind only one OF
the two bases, each of which and both OF
which are essential Ia correctness Of judg-
ment The ordinary observer Of gem
eral business Affairs finding them IN a
depressed and disturbed state, for instance,
ia apt to conclude that the financial stua-
ton very bad and that the last thing
for him 10 do is 10 make investments or
engage in a business enterprise; yet "A care
ful study, simultaneously. Of speculative
conditions might show him tha, the bargain
counter both of securities and regular busi-
ness openings presented the opportunities
Of lifetime The diverse proposition
may also be true. General business may
be in the most buoyant state imaginable,
but that may be- no justification for buying
stocks in Wall Street. Technical condi-
tons may exis, in the latter district that
make a purchase Of almost anything there
inadvisable. A great crash or a great boom
may come in either one Of the two halves
Of The financial world, and the other half
times because II has already discounted
the event and sometimes because cir
cums,ances have rendered It impervious
for the time being 10 what happens outside
Of its own particular existence.
What then. is the condition Of general
business IN this country to-day? There is
no doubt that II is simply magnificent
more than that. that IL looks a. If ii would
continue so for AT least another year. The
wealth of a country is often said to consist
in what comes out of the ground" and If
this is so, the abundant returns of the sea-
sons harvest and the good Nriy>s that
will be obtained for the crops spea k
eloquently of national prosperity and
al least of agricultural good fortune.
The bed of every railroad in the land is
grooming under the weight of freight and
Passenger traffic, while the managers Of
these railway systems complain bitterly
that despite all the great renewals of equip
ment that have recently been made. they
81 lack cars and general facilities to ac-
commodate the business that offers. Bank
clearings, the best statistical evidence. are
steadily averaging % per cent. above those
Of last year, "a last years clearings were
above those Of the wear before. and 80 on
for six years back The universal test l.
mony of railroad officials, manufact urers
and business men Is that orders ahead and
similar trustworthy data seem TO insure :,
continuance Of all this prosperity for at
least twelve months TO come. Judged
by this standard alone, the financial
situation in this country was never better,
But how is the same regarded from the
9 IL. . us.Il L.
financial capital of the country, where
money itself is the article that is bought
and sold, and all The trading and bargaining
in all the States and cities come at last
for balance and settlement? II mus, I've
confessed that something is revealed here
which clouds the picture previously seen,
or at least alters its coloring
That something is a matter which may
not prove permanent, but for the moment
it exists, and it is thistle fact that the de-
mands of business and speculation combined
have well nigh absorbed the floating supply
Of money in the country, have borrowed
money to pretty nearly the credit limit
in foreign lands. and now, vitality in need Of
more money, are beginning TO quarrel
with each other for the Possession of funds
that each has already taken. Ii the dis
pute continues there is no doubt, Of course,
as to which party 10 IT will he victorious
The hands of business are those of the
stronger brother, and speculation will have
to turn out of us pockets what it had pre-
viousy placed there. There are other
elements of difficulty in the speculat tive
situation To which attention might he drawn
the argument, for instance, most fre-
quently advanced by the veterans of Wall
Street who have survived, rich and power
ful, in the trial OF the fittest there. that
while stocks may be worth what they are
selling for il present earnings are to las, ,
il is a matter Of common sense that these
earnings cannot continue an exceeding
great while longer and that hence the
present buyer OF securities must needs sit
on the steps of the Stock Exchange from
now on and watch, lynA-eyed the securit ~ of
his venture. All such considerat ions, how
ever, which depend largely for their force
upon the innate optimism or pessimism
Of tho man who Weighs them. may Re
cast aside The one indubtable fact or
az least what seems 10 be a n indubi able fact
TO many competent students and observers
Of financial matters, IL that speculation
and business IN this country cannot both
60 on ~ their present rac" until greater
quantity of money is made available for
their uso Tho causes that have brought
this about must be- familiar 10 every one
The fairvlike years of prosperity that have
recently been our lot. dawning after a period
of business depression almost equally as
long in which wa became Injured 10 every
species Of economy and labor saving and
stimulated to all manner of invention, have
witnessed an overwhelming outburst of the
forces of home consumption. Quickly pass
ing th" preliminary time when We invaded
and almost controlled every market in the
world with our cheaplv produced mer-
chandise, WE are now confronted with a
home demand for tho self-same products
which taxes our supposed illimitable capac-
~ Of production and which because of
the high prices for all commodities which
il has thereby ntaied. has largely cut
of our export trade and has resulted
in great imports from foreign countries
of nearly all thos" articles with which
"" were flooding foreign markets a few
years ago, The shar" that Wall Street
has PLAYED in the business has been nor so
much the advance in prices TO n level thrice
high tbn Va ia,