The sun. [volume] (New York [N.Y.]) 1833-1916, 1902-12-22
THE FINANCIAL SITUATION.

q few days ago. There is good reason for
the change Things are looking very much
better. The speculative atmosphere has
been cleared to great extent Of the dreams
and nonsense that filled 1t; and while 1t
would not be fair, perhaps. to say that
the character Of the stock market has
wholly altered, It has undergone such
radical improvement as to justify a
greater degree Of optimism regarding its
immediate future. at least. than has been
possible for a long time. Tho himsy
structure reared by the mad speculation
which rushed its work unchecked for months
anu months has toppled down. and prices
Of securities are now almost exactly where
they were in December. 1901. Stocks are
back once more upon a basis Of compare
tive safety; while there is no doubt. OF
course. that in the last year the value Of
the business plants and properties Of
the country represented by security shares
has very greatly increased. The critical
no longer feel that lower range Of prices
for stocks and speculative bond issues is
inevitable. He is impelled. on the other
hand, to the conclusion that higher prices
are much more probable. Even those
who hold that our country has. in a general
and statistical way. passed the summit
Of its recent prosperity and has entered
upon period Of gradual contracting credit
and liquidation Of speculative ventures, can
see that a very marked reaction from the re-
cent extreme depression is entirely in order.
The position Of such observers is. indeed,
simply. that while the boom" is probably
over. a so-caled waiting period Of year or
more may naturally intervene in which the
congestion Of trade shall he relieved, its
heat and extravaganza be moderated, and
yet practically as large profits be reaped
in all carefully conducted and soundly
established lines of business as before.
1t was the money situation, and nothing
else, that made Wall Street, Of late. a place
OF darkness. Every one knew that the
business OF the country was in splendid
shape. The trouble was wholly that the
supply OF funds for speculative purposes
ran out. That was all. but 1t was enough.
Now, whether from a feeling OF greater
security, or the apparent beginning Of the
return Of funds from the interior Of the
country, or the indications that the alb
sorption by the Sub Treasury at this centre
is about over, money has become more
plentiful. Every commission house in the
financial district can obtain to-day all the
money 1t needs-of course paying a good
price for it. This welcome condition Of af-
fairs may be due in part to the marking
down in prices that has taken place. But
the strength Of the present market situa-
ton is that Wall Street was warned in
time and cleaned and purged itself with
out waiting for the rough hands Of
panic to do the work. Hence. the SER
vices Of a panic are not now neces-
sary. nor is there any but remote possi-
bilty that they will obtride themselves
The speculation in cereals has gone to pieces
and our delayed exports Of wheat and corn
are going forward. Foreigners are buying
our investment issues at the prices at
which these are now offered in larger
quantities than Is generally supposed
The sterling exchange market has become
very weak. though gold exports from this
side will probably occur whenever the rates
for money here permanently weaken.
There IL, OF course, not the slightest idea
among substantial financial interests or
sensible people that the muss In Venezuela
will in any way In volve this country. There
has been a very sane view taken OF this
matter by our people. It ia fully realized
that the safety Of our traditional policy
in regard to foreign colonization in South
America il not at all threatened by what
has happened and that the foreign Powers
concerned have the utmost and highest
reason for desiring to avoid any strain in
their relations with the United States II
is appreciated, on the other hand, that this
same country Venezuela has, and has had for
years. a series Of law less, bankrupt and ire
sponsibe Governments One revolution
has swept over the country after another
at intervals Of n few months. destroying
the property Of natives OF the country
and of foreign residents alike and conducted
by Generals and "Dictators," whose sole
thought has been to get enough loot
for themselves out Of their operations to
enable them to fee the country and live
the rest OF their lives In luxury In Europe.
The foreign residents and foreign property
owners in Venezuela must for their part
remember the legal ma kim OF cdreut EN- ptoy
The responsibility is upon them to take
due heed how they build railways and start
businesses in lands where riots and revolu-
tions are the standing order. We have had
our own troubles with Venezuela in the past
and most p ,ople believe it is time that Castro
and others OF his kind in South America
were taught to understand that the Govern
ment Of the United States. with or without
a Monroe d ,ctrine. has no thought Of pro-
tecting them from the consequences Of their
pillage and freebooting. With public opinion
thus formed. the Venezuelan difficulty has
probably troubled the stock market all it il
going to.
Trustworthy reports are that tire coun.
| try's holiday trade, stimulated by the cold
weather. Is the most prosperous ever
known. In business circles the event Of
the week was, undoubtedly, the acaui-
sition by the United States Steel Corpo-
ration of the Union Steel Company, its
chief competitor. The output of the latter
! company is srer cent Of that Of the former.
The United States Steel Corporation has
thus disposed Of its most formidable rival,
while acquiring without the issue Of its
own bonds or stock, an extremely valuable
property. II is the talk in the iron and
steel trade, though no confirmation Of the
idea has come from the officers Of the
United States Steel Corporation, that the
transaction may obviate the necessity Of
| expenditures by the United States Steel
people for the various additions to their
plants contemplated under the much
| oil Il .~f