The San Francisco call., 1903-12-13

verse criticism Of some Of the combi-
nations developed by current litigation
is an additional factor In making spec
ulative sentiment on the subject sensi-
tive. But these influences have merely
modified the conviction of an improve
ment in conditions warranting hope of
better things in the future. Even in
the iron and steel trade the further
indications of the enormous contrac-
tion that has taken place are mingled
with some signs that affairs are in
train for an Improvement. Trade sta
tistics Of December I show the pro-
cess of reduction in production still
heavily in progress without yet hav
ing reached the reduction in require
ments, as unsold stocks have still fur
ther accumulated. But a somewhat bet
ter inquiry and a hardening tendency
Of prices is reported both in, the iron
and structural steel departments. Next
weeks meeting of the steel billet pool
is awaited with great interest to dis
close whether sufficient confidence in
the demand at current prices is felt
70 avoid a further concession.
The November return Of domestic ex-
port shows the greatest value for cot
ton exports for any month in the his
tory of the country. The declining
value Of the countrys imports is no
less significant in the explanation of
the course of the foreign exchange mar
ket and the persistent inward move
ment of gold, notwithstanding the em-
ploynent of devices by foreign banks
to protect their gold holdings. The de-
-
rants the expectation that the decline
in imports Will continue, and puts our
manufactured products on a basis to
compete better in foreign markets,
thus promising a growth in manufac-
turing exports. Organized efforts are
being made to extend the foreign mar
kets for iron and steel products espe-
cially sThe extraordinary outward
movement of cotton invites the COM
parison with the great expo-+. move
ments of wheat a few years ago. The
enormous trade balance in our favor
thus built up was an important ele-
ment in the era in expansion which fol-
lowed. It will be remembered that for
eign holdings of our securities were
swept home in a flood as a result, and
American holdings in Government Sc
curities were largely extended in the
struggle to adjust the balance. Then
followed the tremendous outpouring of
new capitalization which it became the
important item of the time TO absorb.
In the struggle to take care Of the COM
mitments made at that period. includ
ing the formation in United States
Steel Corporation and the Northern
Securities Company, the American
holdings of foreign government securi-
ties were sent back to the home mar
kets to release the resources. In addi
tion our Indebtedness to foreign lend
ers was run UP to a figure Variously
estimated, but which was generally to
represent The highest figure ever
reached by our foreign floating debt.
The. decline in our exports of mer-
chandise and the growthso Of imports fol-
lowing upon the expansion period here
resulted in a scanty supply of exchange
and added 20 the burden of the repay
ment of the foreign Indebtedness car
ried by American finance. The long
continued liquidation which followed
here and the severe sacrifice involved
are known TO have been due in no
small part to the necessities of meet
ing these foreign obligations. as shown
by the high level maintained by the
loans of our banks in face of the vio-
lent liquidation of securities. The eff
feet of the new turn in the interna-
tfonal trade situation must receive i'm
portant consideration.
The bond market hasNbeen active and
irregular United States 3s advanced
II per cent, and the new as declined Il
from the closing call of last week.