The sun. [volume] (New York [N.Y.]) 1833-1916, 1903-03-16
THE FINANCIAL SITUATION.

Our security market last week was I'M
settled and opinions as to its future course
are uncertain. There are judges usually
esteemed good who think that we'll
defined downward movement In prices
has been in progress ever since the Gull
mination OF the famous Gates boom
last September. These Observers who'
II Is needless to say, are for the most
part professional spectators, attach great
Significance to the fact that in the period
named prices Of stocks have fallen lower
on each successive drop" and have failed
each time 10 rally to the high point i'm
mediately preceding Even II this diagnosis
Of the situation Is accurate, the market must
still be governed by the weli-known ten
dency Of prices under such condiuons 10
recover from time to time about half the
loss previously sustained; and Whenever,
therefore. there Ia reason to believe that
the low prices for the time being have
been touched, wary traders do not again
resume their speculations for the fan until
approximately the normal rally has taken
place. This normal rally, it should be
noticed, often takes place with extreme
ouickness and usually follows after
period OF great market excitement, when
the fall in prices has produced a SEMI
nonickv feeling. II il understood to be
the nosition of those who still announce
themseives al against the market that the
feeble and dispirited nature OF the rally
that has occurred indicates that prices
are not yet In shape for the usual healthy
rebound-that, in other words, thorough
liquidation has not yet been seen. On the
other hand, some Of those who have been
most prominent in selling stocks that they
did not own declare II to be their opinion
that the money scare and other bear
arguments have been worked for about
all they are worth that the decline In prices
that has already been accomplished has
discounted a great deal OF bad news
and that there are or have been too many
small men In Wall Street talking about ruin
and desolation. The prevailing impression
seemed to be at the close Of the week that
enforced liquidation was. for the present,
at least, over; and Saturdays bank
statement was accounted favorable. The
statement showed, nevertheless, that de-
spite a reduction OF SIS 900 900 in bank
loans In the last two weeks, the bank sur
plus was less than il had been at any similar
time in twenty years. This proves how
large the demand for money is from quarters
outside OF Wall Street.
There is no doubt that operations in the
stock market at this time, eithst for in
vestment or speculation, are again con-
fronted with the problems OF the disparity
between a Q per cent. money market and
prices OF railway stocks on per cent.
basis. Of what may be called the quantita-
tive ability OF the money supply Of the
country to provide for the prevailing vast
plans OF business development, Of the
wisdom on the part Of corporations in
making such large expenditures for i'm
provements and new construction when
the cost Of doing 30 Ia abnormally high,
and OF whether general business az illus
trated by current comparisons bet ween
railway gross and railway net earn
ings is or is not being conducted too ex-
pensively. Part Of this expensiveness Is
unquestionably due to the shameless eStor-
tons Of the labor unions; and there are
those who maintain that the worst
feature Of the entire financial situa-
ton, the one from which the greatest
danger Of check or trouble is to be ap-
pretended, is the apparently limitless exac-
tions Of these unions and the seeming effort
Of their leaders TO reduce our working
people to the sodden and brutal state
Of industrial servility that obtains In Eng
land, for instance, and that has dealt the
business Of that country a blow miehtier
than could hundred wars in the Transvaal
All these questions converge sooner or
later upon the money market, and II one
could know what the rates for the use Of
money were to be in the next six months,
he could make up his mind concerning
the probable future prices OF securities
with reasonable dehniteness. The best
opinion seems to be that fairly high rates
for money-something like those now
rIling-will hold until about May /. and
that then they may ease little. A billion
bushels Of corn still held in farmers hands
and bringing ~ cents q bushel and two
or three million bales Of cotton selling at
$50 a bale mean the use OF a good deal
more money in the agricultural sections
than In ordinarily the case at this
time Of year; and this fact has had
more to do with the scarcity OF money in
Wall Street than has been admitted. There
again seems necessity OF a little general
study OF elementary facts regarding the
relations between the Tpasury and the
national banks. and OF the true nature. es-
p-cially, Of the so-called Treasury drain
upon the oountry's circ,ilat ing medium. Our
Tariff and internal revenue laws do produos
q Treasury surplus-of that there IL no
doubt. The money collected from internal
revenue can be and h deposited Ia the
banks. % that no greai contraction takes
plsoe from that source the trouble h0ws
from the operation Of the old lave requir-
ing customs payments 10 he made 10 the
Treasury dirra Up 10 last Saturday
H.. .,.I.fan.s f,.oelri. faf th. 0.cal x.s,