The Birmingham age-herald., 1903-12-06
MONEY STATUS IS
 BECOMING EASIER Accumulation of Funds in New
 York Predicted ALL BONDS ARE-IN DEMAND Action of Republic Steel 6 Iron Com pany Believed to be Related Ad- mission That Previous DiVi-
 dends Were Not Justified.
ALL BONDS ARE-IN DEMAND
BY w. G. NICHOLAS.

Is enthusiastically towards easier money
 conditions. Governing indications point
 to the accumulation of funds in New
 York and other important fiscal centers
 after the first of January. The fear with
 bankers, trust companies and money lend-
 ers in general is not in a scarcity of cash,
 but that 1t will pile up uneomfortably.
 This condition, if it undertakes, will be
 due quite as much to the timidity of bor-
 rowers as to any other cause, develop
 ment which can hardly be looked upon IS
 wholly unfavorably in a broad sense.
 Such condition will reflect reactonary
 tendency in general business, and lack
 of confidence in the near future The ef
 feet, however, will be corrective of the
 speculative excesses which have been
 such feature of recent financial and
 industrial history
 The business world has been taking in
 sail for months and the tremendous liqui-
 dation which has been going on has cur
 tailed indebtedness to an extent hardly
 dreamed of. This is not wholly reflected
 in the bank statements which appear
 periodically, but the process has never
 theless been going on insistently and on
 tremendous scale Personal expenditures
 have been cut down in every direction
 where the pinch has been felt in the
 least. This, to a considerable extent is 0
 mere curtailment of wastefulness. It
 has not, so far, been an impignment upon
 the comfort of the people, and has, there
 fore, not reduced mercantile sales to the
 extent which might have been antic~
 ipated. LuXuries have been Topped off to
 a considerable extent, but the business
 of those who supply commodities that
 enter into general and necessary con-
 sumption keeps up surprisingly.
 Background prosperity has not suffered
 appreclably There have been more
 bounteous harvests, but the farmers and
 planters of the west and south are get
 ting larger net returns for their surplus
 products than in any previous year, with
 possibly one exception. Everything that grows out of the ground brings remuner-
 atve prices, and the year 1903 Is adding
 an amount far above the average to the actual wealth of the country. Specua-
 tive accumulations have in many cases
 melted away, leaving their former pos sessors in a very uncomfortable state,
 but this is a misfortune the importance
 of which is very likely to be exaggerated.
 In fact, 1t has been greatly exaggerated and the impression cultivated that be-
 cause of the i'll luck which has befallen the gambling element, the whole coun- try is in danger of a business revulsion
 which may grow into a panic ultimately. Everybody now realizes that the reaction (which has taken place in stocks and bonds was something which could not have been avoided and that it represents simply a return of values to something like a normal basis. In this decline the good things have suffered with the worth less or speculative securities. Recovery of the good things will inevitably occur and already investors are in the market for securities which have in them real merit and which look cheap, taking into proved earning power and the natural growth of the country upon which they may be ultimately dependent.
 A market feature which Is now due to develop is the increasing demand for bonds as well as high grade stocks. The great mass of old bonds are securely lodged in the strong boxes of the provi- dent and wealthy classes. The newer is- sues are still in the market to consider able extent, but they are gradually being taken out of the vendors hands by those who have money to invest. By the turn of the year. this movement of capital will increase There will be still more new issues of bonds to supply the needs, but the absorptive power of tke American public in this direction seems to have no limit As the wealth of the people con- tnues to pile up, the surplus accumula- tons must find investment. Inasmuch as there is now a speculative chill over the situation which promises to extend for some months into the new year, own CTS of idle cash will perforce turn to bonds as the most desirable field. With in the next six or eight months new issues to the amount of possibly $500, GOO or s4OO GOO may be offered for sale. The proceeds from these bonds will. in large measure. be used to take up floating indebtedness incurred in neces- sary improvements to railroads and the of floating into fixed capital as well as in the transfer of money in broad Improvements into capital account, wherever 1t belongs.
 The financial management of the great corporations now see their way clear. They are no longer worried over the future They, have been standing in the gap for a year and have in many cases buwarked their enterprises with their personal credit They have shown confidence in their properties through the worst stages of depression when the out look was most threatening and when the prophets of evil filled the newspapers and market reports with the gloomiest of forebodings. Now, that the outlook has frightened and there is a certainty ahead of relief the entire securities situation feels the change Until the current sup af hopda nd ha iu- sued which are impending are pretty well cleaned up by the investment public. it will not be safe to bank too strongly on hopes of a marked permanent improve ment in stocks. This will come later.
 As the bond market hardens, there are likely to occur sharp recoveries in stocks but hardly a movement which will result in an uplifting of quotations that will stick Banks in every large city are car rying securities which they will unload at the first opportunity that offers for es- caping without loss. Every considerable rally will bring this stuff out, and there is a mass of it to come. A few of the sturdier banks have already applied the axe, but a large majority of them have unsold collaterals on hand which if dis posed of at present prices would show a loss The extent to which tiis has been done is, not sufficient to jeopardize the safety of the institutions. but it is, nev- ertheless source of discomfort to the people who are carrying the load, and they make no concealment of a desire to get out from under. It is the selling for account of banks and trust companies which checks every important rally in the market. The bearish professionals rely upon liquidation of that kind to aid them in their campaigns on the Stock Exchange Heretofore they have not been