The San Francisco call., 1904-04-28
THE BUSINESS SITUATION
The Present Reaction Not Re
gdrded as Serious.

Henry Clews says in his Wall street cir
GUAR Evidences multiply That genera
ousiness Is undergoing more or less Of re-
sctcn' nothing serious still ~ exists CleaI-
Ing house returns have been showing decreases
last year Tor some weeks past, ana the latesI
railroad earnings are running not less than
per cent below last year. In our previous
aoflces We nave also called attention 70 me
decline In both exports and Imports. The cot
ton goods trade has been seriously deranged
By the late disastrous speculation IN cotton,
and. in spite CT lower prices and curtailed
production. manufacturers are unable 20 md
satisfactory market for their products. In
the iron trade always an excellent barometer.
a very conservative feeling prevails, anu
though very encouraging Improvement ioi-
lowed the depression Of 1903, stan the recovery
has. very decided limitations.
"A careful survey OF the business situation
reveals nc unsound features A great deal
ot readjustment work has already been done,
and weak spots have been pretty thoroughly
eliminated, especially in financial circles,
where the situation is really seunoer than for
many months In spite Of this fact however
ID is evident that the readjustment process is
incomplete. and the real turn cannot De eN-
pected until values have declined in other
|. than security markets. Wall street has suf-
lereC ali and more than IL should in the form
of shrinkaEe n values; but enterprise is still
held I'D check by the extreme high cost "
everything that Foes into fixed plant Both
tive level. and until these have undergone their
inevitable share OF the general read1ustment
Nlval of industry. This viii call for more
reasonable attitude on the part Of organized
long which ID resisted VIII simply result in
adding the number OF unemployed.
IMMENSE RAILROAD BORROWINGS.
Another factor which adds TO the conser-
vsuve feeling in Wall street is the immense
borrowings by railroads and other corpora
tiQns on short time notes. Some estimates put
the amount OF such loans during the last six
months a. about $500. 600. 600. These figures
probably explain the high record loans OF the
New York banks. which exceedingly well
satisfied 10 find such safe ana profitable en-
plOymert for their funds when ordinary busi-
ness requirements are diminishing. These
loans VIII probably be turned into nXed capital
hen the bond n1ari-et improves. but during
the interval the temporary locking up OF such
speculation. otherwise we might pie
thora OF loanable funds with all the attend
ditions are probably the most satisfactory OF
any an the great divisions of business The
mercantile situation certainly sound. but
business is diminishing in volume. while the
tons above referred 10. Very soon the coun-
Try Will be passing through the excitement
Incidental 70 q Presidential compaign. Fortu-
Eatcly. there are fewer disturbing issues than
usual and there is likely 10 be less postpone
i enL Of enterprise than IS common in Presi-
Ddential years. Nevertheless. there are two inn
election and the crops-and upon these the
course % the market will largely depend.
-Four or I'VE months viii be required TO an
tcipate these results. and meanwhile We need
hardly look tor very active market. unless
unexpected developments occur ia the war be
tween Japan ana Russia or in the merger
these rival railroad magnates is one Of the
most potent influences ana a close watch must
BE- kept on movements in that quarter The
better prospect, however. % an early settle
1ncnt Of these difficulties a result Of Mr..
Fflls success ~ the Northern Securities stock
holders meeting impaired some strength 10
the market AZ the close OF the week; otherwise
the weeks transactions were mainly confined
10 moderate fuctuatiOns'