The sun., 1903-11-09
THE FINANCIAL SITUATION.
MONDAY. Nov, Q,

| OF !, , or that the cause Ia, Tor some unknown
reason, only superficially effective. We
have had an opportunity In the last week
| of applying this maxim to the question OF
the amount Of money at hand now or in
| the near future for local financial uses.
| The week before last it was known long
| before the end Of the week that the bank
| surplus had been heavily encroaohed upon
and the surplus finally shown Of but little
more than $l0,OOO,OOO was rather more
! than had been calculated. Last week cash
| losses of the banks of more than million
dollars day were made public, and Satur-
diy's bank statement showed a surplus
! reserve of but 1894 ,225. On the face of
| things the situation seems such that call
money should logically be ranging around
| 10 per cent. and time money be obtainable
only by means of payments of heavy
commissions over and above the legal
rate. Yet at no ime recently has call money
heen above 8per cent, and most OF the Stock
Exchange call loans for the week were
made at but little more than per cent.
What is the reason Of this +?
The chief reason is one whose force only
became apparent week ago to-day,
namely our control Of the foreign exchange
market When, last Monday, sterling ex-
change broke to the gold point, 1t was
like rush Of sunlight into darkened
room. 1t soon became perfectly clear that
1t is now within our power to take gold
from the other side whenever we need
it, and that il anything like money strin-
gency threatens we can force imports or
the yellow metal in quantities that will only
be limited by the rest rictons Of the mari
time insurance companies on the ship
ments. 1t is our export OF cotton, chiefly
to Continental Europe, at the very high
prices now prevailing, that has given us
the whip hand here but our command OF
the situation has been materially helped
by foreign purchases in the last month
of our high grade securities, mostly, OF
course, of the mort gage bonds Of our rail-
ways. France has been larger purchaser
Of American securities in the last few months
than ever before in her history. Another
reason il the conviction that our losses OF
money to the interior Of the country for
crop moving purposes will this year be
OF the short and sharp order and that two
weeks more at the farthest will see the
crop moving drain at its height. Finally,
demands for money for general business
and for Wall Street speculation are less
onerous than usual. We can get along
with less money because we need less
money. Wall Street has had it's liquida-
ton. has put It's house in order and is now
resting quietly. Because OF these reasons
people who have in the past been expert
Judges in such matters say that we will
have easy money by the beginning OF
December. and by New Years Day and for
a long time thereafter we will have very easy
money. Nevertheless. as such a happy
ending Of the case is a matter OF hope and
confidence rather than certainty, 1t Is Just
as we'll for the stock market not to pre-
srlme too much upon It, There is an ele-
ment OF treachery in the money situa-
ton that has time and again displayed
itself, like soft handclasp turning in
simultaneously into a deadly grip. When
money is freely moving back here from
the West, Wall Street can properly relax It's
restraint and caution.
The affairs Of the United States Steel
Corporation occupied the centre OF the stage
in Wall Street last week, as. indeed, they
have done for a long period. This. OF course
has been simply because the Corporation
is our largest steel and iron producer, and
the steel and iron situation has been Of
late greatly confused and disturbed. The
fundamental fact about 1t is that heavy
and permanent acknowledgements, that
Is, as such things go-hae taken place in the
price of pig iron. The fall, or the greater
part of the fall, has been due directly to the
action Of the Southern producers OF pig
iron who have broken loose from all pooling
agreements and are offering iron at cut
throat prices but a decrease in consump-
ton of all iron and steel materials due TO
the high cost of these materials and the
excessive demands Of labor had long been
in evidence. These two developments led
to price cutting on steel products by the
so called outside steel producing con-
Germs and 10 demands on the large producers
hy the chief consumers for a reduction in
prices of all lines Of steel manufactured
articles. Orders at the old list prices have.
in fact, been generally withheld. What,
therefore. is to be the policy Of the United
States Steel Corporation? II the iron and
steel trade was now in the shape 1t was in
ten years ago, that policy would be very
clearly marked out 1t would be what
Mr.. Carnegie did on numberless similar
occasions, to slash the prices of steel down
to the very lowest figures, 80 that COM
petition would cease and the United States
Steel Corporation get practically all the
business there was in sight Then gradu-
allv prices would rise again. But now the
Steel Corporation, while by no means hav-
ing monopoly Of the country's iron and
steel business, still does the lions
share of it. If it chooses to shut its mills
and decline to accept any orders, other
steel plants in the United States cannot
begin to supply the wants that will be ad-
dressed to them. There is, therefore. no
urgent business reason why the Steel Cor
poraton should make any cut Of the old
fashioned description in prices But what
was in reality the idea at bottom in the for
nation Of the United States Steel Corpora
ton? 1t was to prevent Just such slashng
in prices from time to time as is now dis
cussed Just as it was, conversely, to prevent
runaway market in prices at other times
It was to accomplish the valuable and de-
sired object. in other words, of giving
stability TO the iron and steel trade; and
as the Corporation sold rails and billets last
summer. and for long time previously,
at S27 and s2s a ton, when it could just as
well, if it had pleased, have asked and re-
ceived SIS a ton. 80 now is it not entitled to
make less violent reduction in prices than
would have taken place under the old harm
ful methods OF doing business? 1t is en-