The sun., 1902-11-10
THE FINANCIAL SITUATION.

been different its influence upon the fnan-
cial situation would have been great. The
fact IL that other matters besides politics
are the dominant forces in Wall Street Just
now: and n study Of conditions there re-
veals with greater and clearer emphasis
the more the study IL prolonged the wide
difference now exis.irS = between the health
Of general business and that Of stock
SPECULATION. II is a topic that has been
frequently referred to in this column, but
II will bear repetition Legitimate business
was never more sound or active. The
railroads. manufactures and stores have
more on hand than they can attend to, ard
there seems nothing In sight that can check
their prosperity for a year to come. al
least. But it * this self-same prosperity
that has absorbed and will continue to
absorb like a sponge the floating supply
Of money in the country. lea wing Wall
Street In hapless state An increase Of
81 oOo. 600 600 or $4,000 oCO.CC0 in banking
credits in the last few years and no Increase
IN banking funds-that is the trouble with
the situation. Speculative expansion of
credit has AZ last been forced TO recognize
It's bounds and to set about contraction,
Of course the railroads and all lines Of
business are making money, but Of what
help Is that 20 the Wall Street specula
tor if he cannot get money to enlarge
his commitments or even to adequately
protect those that he has already made?
And is il so certain, moreover, that business
will continue profitable while the expenses
Of conducting il go on increasing? The
true basis Of credit j. not SO much cash
a. confidence. and the confidence Of the
monev-lending community in the specula-
tor has been shaken. Every observer Of
markets and financial conditions knows
what the aftermath always has been in
times nast Of such eras of prosperity in any
country as have been enjoved here now
for a long period. II is the hope Of the
more sagacious Of these ohservers-men
whose hands are 20 powerful as their ewes
are keen--that the curb that they have
placed upon speculation may result
In avertnC the CUSTOMARY disa ster that the
lessons Of experience bid them dread.
Hence thov have small pity for the over
loaded and reckless market operators who
have boon forced in the last month. and will
be forced farther to adju~ themselves 10
salu'arv necessities: and they are quite
content 10 rest under tho snncr ~ ignorant
and irresponsible financial adventurers
that Wall Street is the only blue spot in the
country. The hope 81 these great interests
that ther" will b" a gradual reduction OF
stock market liabilities, and all their Efforts
arc hent in this direction Hence the trend
of prices on the Stock Exchange is down
ward The professional traders are mostly
bearish, hut as their operations are all for
quick and small profits. which they in
variahlv hasten 20 secure their attacks
upon the market so far have been by no
means Formidable. Pending the time.
then, until bank reserves. both in this CITY
and throughout the country are made
strong and the confidence that has departed
returns, the indications are for Just such
a market In future a. now prevails, the
reasonable probability being, Of course.
that the process will establish before il is
completed n lower range of quotations for
speculative securities.
Naturally, there has been much talk
Of needed financial leg station. The Cham
bar Of Comm, ,rc", upon tho mott ion of one
Of the most prominent cit izen~ Of the finan-
cal world, has taten the matter up. and
rna -lhiart will b, tha ona chiefly dis
cuSSai a' the approaching annual meeting
Of the American Bankers As-ociati ion.
II NAV Nv ii'iN''N llRl' l''I' anu no"
that no responsible body of Intelligent
man, bankers or otherwise. will ever bo
found advocating the adoption in This
country of n bank asset currency system
except a. II il strictly limited and sur
rounded with the sureSt safeguards, and
that no such scheme, ANYWAY. will ever be
launched until the people are prepared
for it and earnestly and thonghtfully de-
nand II. II will take years TO bring about
such n state Of popular opinion. The trou-
hle with our present currency system il not
that money is too scarce, but too plentiful
and il, IN response to the demands of spccu-
lators. Congress should rcclile-slv ordan
a further imitation of our circulat ing
me,iium. the most mons'roIs financial
crime Of tho century would be perpetrated
Anv man who declares that We need moro
money in this countrv-our Circ,Ilat ion
now having risen 10 $50 30 per capita, an
astounding sun-cannot avoid the sus-
picion that he speaks merely as n stock
market gambler and that he would like to
bring about in this country the conditions
Of France and England in the davs Of the
South Sea Bubble What our financiers
ought TO do is TO invent some method OF
making Our present money supply flexible,
80 that the circulating medium will con-
trac, and expand according to the demands
81 legitimate business. Probably no better
plan can be adopted as a starter than the
German method of allowing banks to issue
circulation beyond tho authorized amount
up 10 a certain percentage of their capital.
on no other security than their ca initial.
and on payment Of a heavy tax TO tho Cow
crnment But there Is no plan that can be
devised, after all, that will ward Of from
any money market the retribution certain
to fall upon II IL demonstrating institu-
tions choose TO foment abnormal and reck-
less speculation by pressing all their cash
to loan on speculative collateral in disre-
gard Of the known and certain demands of
| the country for funds for legitimate blisi- =
ness
A matter, however. that seems much more
li,ely to be acutelv discussed in the near fu-
ture than financial legislation is legislation
affecting corporat" enterprises that NAV be
urged bv the President of the United States
in the message that he will send to Con-
gress In the first days Of December. The
President has. II il supposed. abandoned
his idea that n Constitutional amendment
il necessary 10 cure tho "trust evil and
will cnd"avor To find remedies for the
disease in the passage of new laws by Con-
gross A general Federal corporation law,
which would allow the great mass of cor