The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1902-09-22
MONEY STR|NGENCY
1T HOLDS SPECULATIVE FORCES
IN WALL STREET IN CHECK
EFFECTIVELY
PARTIAL RELIEF THROUGH
GOLD IMPORTS AT HAND

PARTIAL RELIEF THROUGH
GOLD IMPORTS AT HAND
Outlook on the Stock Exchange, Aside
From the Monetary Situation, Is
Very neutrality-suspicious. Concern
Felt at the Manner in Which Big
Loans Are Being Issued.
Special to The Globe
NEW YORK, Sept. 21.-While the
stock market exhibits splendid resist
ing qualities, still monetary stringency
has etfectually held in check the spec
ulative forces which might otherwise
have been set in motion by excellent
crop and business prospects. Partial
relief is now in prospect through gold
imports and Secretary Shaw's efforts
to offset treasury absorptions. Bank
reserves are, however, down to the
vanishing point, having declined $13,-
100000 since the beginning of August,
the highest period since Feb. 1. Loans
were at their highest figure on Aug.
16, since when there has been con-
traction of $4O000O00 This is a very
respectable amount considering in
creased business and crop demands,
and strongly suggests liquidation in
some quarters of more or less impor-
lance.
A further forced contraction in
loans seems probable if bank reserves
are to be maintained. 1t is quite Ger
tain that interior currency demands
Wi ha low Iay
ing to the better crops and activity Of
business. Very likely also the return
movement of currency will be delayed
longer than ordinary, in which case
the local money market will receive no
assistance from the interior until the
close of the year. The treasury's
ability to relieve the money market is
somewhat limited, and partially offset
by increasing customs receipts. Once
more we are having an Illustration
of the clumsy working of our present
currency system and the necessity Of
a more elastic plan. which would al
! low the supply of money to expand and
contract in accordance with the de-
mand.
Gold imports.
For some time past it has been evil
dent that the principal source. of re-
lief to the local money market would
be in gold imports. Gold is already
coming from Australia, the Transvaal
and the Klondike in increasing sums,
and very shortly Europe will be
obliged to give way to American de-
mandS. AS previously intimated In
these advices, Paris will be the most
likely point of assistance, Berlin next
and London last.
Foreign bank rates may advance,
but this will not prevent a movement
of the precious metal to the quarter
where it will be most needed. Its flow
in this direction must soon be fac11-
tated by increased offerings Of cotton
and grain bills; and should Europe
later on show more disposition to buy
American securities, which is not be-
yond probabilities, the problem of set
Ting our growing Indebtedness in Eu-
rope would be much more easily solved.
At present the foreign situation, Is al
together more favorable to the Amer1-
can stock market than 1t has been for
many years.
Augustus exports showed a loss Of
| $13,000,000 compared with last year,
due to shrinkage in shipments Of agr1-
cultural products, while imports in
creased over $5,500,000, the result OF
urgent trade requirements at home.
Loss Only Temporary.
Such returns would be regarded with
concern only it is well understood that
the loss in grain exports was merely
temporary and that in the coming sea-
son our agricultural shipments are
likely to run between $75,000,0OO to
500 ,000, 900 in excess Of the last fiscal
year. Our leading bankers are keep
ing a close watch upon international
trade and financial movements, and
much of their present confidence in the
future Is unquestionably based upon
the probability of our paying very
large proportion of our foreign indebt-
edness in products. In the last twelve
months there has been a shrinkage In
corn exports alone Of SCI, 10000 which
will not be repeated this year.
On the stock exchange there have
been sharp fluctuations. Aside from
the monetary situation the outlook Is
very satisfactory. The big leaders
have the market well under control,
but are evidently not disposed to take
the initiative at present. Railroad
earnings continue large; general trade
shows increasing activity; the iron
trade is taxed to the utmost and for
eign rolling mills are being called upon
to satisfy American demands. The
darkest spot upon >the horizon Is the
coal strike, which still continues, but
seems to be gradually dying. Some
ness with which big new loans are is
sued.
Day of Reckoning Postponed.
Thus far the effect of excessive cap
italization has not been duly felt, and
the day of reckoning seems likely to be
postponed until the turning Of the
tide Many things have been accom-
plished during the past few years that
dazzle the trained observer. Old stand
ards of measurements may have to be
abolished and new ones substituted,
but the laws of sound finance remain
unchanged, and will be found to work
just as surely on a large scale as upon
the less magnificent plans of the nine
teenth century. Thanks to another
good harvest and our continued indus
trial activity, the outlook for the stock
market during the next few months is
in most respects encouraging. Our
railroad magnateS are actively at work
trying to give the community or in
terest idea some permanent form. This
is task of huge proportions and Will
require time for completion, but it is
very vital factor in the present under
lying strength of the market.
M. Raffalovich, the eminent French
economist, attributes the remarkable
condition of our stock market to these
five reasons: Four or five successive
good harvests; expansion of national
bank currency; large industrial and
commercial profits; the energy of our
leading financiers, and the large profits
made by banking interests in railroad
reorganizations after 1893. These con-
siderations led M. Raffalovich to think
that the United States has not yet
reached the zenith Of activity: but he,
TOO. takes occasion to issue warning
against our overcapitalization and the
excessive issues of new securities.
Low-priced stocks continue to be the
favorite speculative issues In spite Of
ticfn O1ltlnOlx thu