The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1903-03-12
A FEW CLOUDS
ON The HORIZON
Financial Outlook on Wall Street
and in the East Is Not
Encouraging.
Where the Money Has Gone and
Why It Has Not Flowed Back
Unto the Street.
The Tariff Believed to Have Caused
Artificial Conditions-How
Competition Is Killed.
From Tho Journal Bureau, Room Is, Post Build,
ing, Washington. 80 -. ..'


From Tho Journal Bureau, Room IS, Post Build |
ing, Washington. - e. =. ...'
Washington, March 12.-W. D. Wash
burn, Jr., Of Minneapolis, a republican,
finds nothing in the present financial out
look in Wall street that is encouraging.
He thinks that the country has reached
the top of the wave of prosperity, and
may encounter a setback soon, during
the present year if crops are. mot up to a
high standa I'd. =
He attributes the present condition to
the greed of eastern fnanciers, who are
exploiting the entire country'.fer selfish
purposes and holds that the tariff is so
intimat eiy related to the situation that it
cannot be ignored in any sane discussion
Of it. .' .r~-.s.-r = ~
Mr.. Washburn thinks that there should
be tariff revision. He advises the west to
keep it's money at home, and in a general
way arraigns the eastern financier and
holds him responsible for any financial
depression which the future may bring.
Notwithstanding the apparent evid-
ences of prosperity" said Mr.. Washburn.
1.-THE New York financial market is
| nervous and distrustful. With any
marked decrease in bank reserves, the
whole line Of stocks drops several points,
call money jumps up to Is to 20 per cent.
Order is then re-established by concerted
and gigantic efforts Of the banks and Of
the financial nlagnates, who are now prac-
ttcally upholding the market
Where the Money Has Gone.
"Minor causes leading to this diseased
condition of finance are at once apparent.
Large volumes of money which have hith-
! erto gone to New York have ceased to
flow in that direction. In the west and
the south, banks are holding their bal
ances largely for the use Of their own Gus
toners. This is due to the legitimate de-
mand for legitimate business enterprises.
In the northwest local capital has beeen
| largely withdrawn from local banks to
| embark in the great land movement
which is taking place in Minnesota, the
Dakotas and the Pacific northwest. These
| Investments are apparently legitimate, as
these lands are taken for settlement, and
| will shortly produce agricultural wealth
| to warrant their investment. Probably
| $4,000 settlers moved from the corn belt
| into this region last year; at least 100,0 900
! will change their residence in the pres
! ent year. The amount Of cash necessary
to maintain this continued agricultural
movement in the purchase of land, equip
ment and stock, is very large. This
movement has already obliterated the local
deposits in hundreds of small trade CEN
| tiers in the west. AT a moderate figure,
| this movement for the past two years has
|
ordinary commercial channels to which it
will not return for a time. The banks In
/ the west have also grown reluctant to
| hold their former large balances in the
| east For a time western banks were at
ira cted by favorable interest rates, and
kept their unemployed capital in eastern
i banks. The constant f1uctuatiOn of the
| stock market, the growing distrust OF In
dustrial collaterals, and the constantly re-
curing spectacle of call money at Is to
i rs per cent in New York, have chilled
the ardor of conservative western bank
ers in connection with eastern balances.
The inducement of panic rates will no
longer tempt them to hold large deposits
where such abnormal conditions prevail
under apparently healthful business con-
ditions.
1 ",The continual absorption of money by
the United States treasury, far beyond the
needs of proper expenditure also con-
stantly contracts the circulating medium
to the great injury of business, not only
in New York. but in all parts of the United
States. The. defeat of the Aldrich bill
, also adds to the general distrust 1t will
now be impossible to provide for an elias
: tic currency to Withstand a sudden bust
: ness crisis, until the next congress con-
, venes., In the meantime, cash necessary
to transact business congests in the treas
T ury vaults. where it is impossible to dis
lodge it except by the purchase Of gov
=. eminent bonds, which in turn tends tt
: decrease the circulation Of national bank
. notes. AS the last purchase Of govern
ment bonds was largely utilized as the
e basis of still greater speculative enter
prise on Wall street, the treasury will
hardly resort to this heroic treatment ex'
cept in the event Of a national financia
l. crisis. One might as we'll pour money
into a rat hole as to buy bonds in Wal
: street under the existing conditions
oF1 dc Sfo f1,n
l. ket only for moment, and easier none.
- is used as pretext for still higher valua
=" | TONS. \'!..... .. r
It Vast expenditures Of money in colossa
= building enterprises, in the expansion o
# necessary traction systems, and lastly il
wild and extravagant living in New Yorl
D. and eastern trade centers, also tend t.
p create the constantly increasing financia
> stringency.
ID The Tariff as Factor.
IF apart from these minor and apparen
causes, there are deep seated and radica
20 reasons for the present unsatisfactor
condition. These reasons touch deepl
I'd upon the financial, economic and socie
life of the American people. They are in
ne volved in the present system of tariff an
the so-called trusts which have developed
'The protective tariff was erected by tn
republican party for a distinct and legiti
= mate puIPOSe. ..'r.-.- .s. .ts ..
~ ct was intended to protect infant indus
= tries against European labor and capita
until those industries could compete with
=, out protection, and with fair prof
- against the outside world -
ut was expected that this would rren
10 der us free of the European market:
,e develop large: and thrifty class of Amer
lg can working that would prove car
le able of sustaining Anglo-Saxon theorie
of government.
: 1T was also expected that this body
- we'll to-do laboring people would affor
large consumptive market for anothe
intelligent class, the agriculturists .wl
in: turn would produce wealth from til
soil in those regions where situation an
resorces were not adapted to manufactul
ing enterprises. Incidentally it was SUI
posed that competition among hon
manufacturers would provide all the pee
pie with good articles at a price assurin