The sun. [volume] (New York [N.Y.]) 1833-1916, 1904-09-12
THE FINANCIAL SITUATION.

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The first weeks OF September constitute,
as has not been infrequently noticed In this
column a time Of general financial retro
spect and forecast from the strictly Wall
Street point OF view. Indeed, 1t 10 open
to debate II the period described does not
form in essence q real beginning Of the
financial year, although, Of course, few
| IL any great corporations actually choose
this time as one In which to draw q twelve
months balance OF their accounts. But In
the first fortnight Of September the long
summer vacations OF most Of the people
interested in Wall Street come to an end.
While these operators, large and small,
have been away from their homes and busi-
ness, they have usually reduced their
speculative commitments to minimum,
20 that when they return they do 10 with
minds prepared to take more impartial
and deliberate view OF Affairs than was the
case before. And at this time, too, the
probable outcome Of the seasons crops 10
generally approximately understood. Look
ing back for almost year it is seen that the
course OF security prices in the. period
has been that OF steady and considerable
advance, while the reasons for this fact
stand out almost as clearly as does the
fact itself. The rise in prices in the FIRST
part Of the year was caused primarily by
a natural reaction from the prolonged sell
ing movement which had lasted throughout
the year previous. An upward swing In
quoted values would have gone a good
way from the operation Of this cause alone,
even had II. lacked the help OF other
forward impulses. Secondly, the advance
was due to the discovery that fears OF
general and decided wave OF business de-
preston following the financial liquidation
were quite unfounded. A year ago to-day
It was doubtless the opinion OF by far
the majority Of Wall Street experts, 80
called, that the country was in for
long stretch OF hard times. These
observers were divided upon the question
whether the liquidation in Wall Street
proper was over, but they were pretty
unanimous on the point that business
throughout the country was about to suffer
severely; the reason being that business
always had 80 suffered under what appeared
to be similar circumstances In the past.
But It soon developed that this reasoning
was fallacious. Activity In certain lines
Of business in which an obvious and ex-
treme boom had been in progress did,
indeed, halt pretty sharply; but the vast
AGRICULTURAL prosperity of the West resisted
all the forces making for depression that
originated In the Eastern part OF the country,
and taking the country as whole. business
went on, II not as uproariousFy as before,
at least in fairly satisfactory shape So
much for the first half OF the year. 1t Is
now evident that what has In the second
half Of the year sustained the rise in prices,
and even pushed 1t along further, has been
the exceeding abundance Of the supply
Of money available for speculation and
investment and the flip given to general
speculative sentiment by the very notable
advance in the market for agricultural
commodities. When money can be Dor
rowed as cheaply as It has been since March
1. and when business panic or even time
OF business stress is seen not to be near,
no selling Of stocks worthy OF the name
may be expected from patient spectators
for the rise or from actual owners OF the
share certificates. This Is what the bears
In Wall Street have recently found out
to their cost. And when this situation Is
emphasized by high degree Of assurance
that the crops nowhere In the country
will be failure, and everywhere will sell
at high prices, the strength OF security
values during the summer Is easily ex-
planned.
And yet it is exactly these conditions
that have made and are now making for
cheerfulnees with the rank and file OF Wall
Street concerning the financial situation;
that vet lead some Of our wisest and most
successful fnancers and business men to
buy stocks, IL at all with extreme discrimi-
nation at the prevailing level OF quota
tions. plethora OF money, brought about
of course by dsuse OF funds In business,
while it facilitates for time the manipula-
tions OF spectators and Of various financial
interests, does not increase by the subdivs-
ion Of a scruple the consumption at home or
abroad OF articles made in American facto-
ries or raised on American farms; and high
range Of prices for foodstuffs, when 1t is I'm.
accompanied by proportionate enlarge
ment of export sales Of these commodities
and even causes a great lessening OF the
export demand experienced in former
years, so far from being blessing to the
country, is a disaster, since 1t mulcts the
inhabitants Of the country as whole for
the benefit Of the one class engaged in the
production Of the commodities concerned.
The present condition OF agricultural
affairs in the United States has been fire.
auently compared to that Of the year 1898,
the Letter year." when wheat freely sold
for a time at 81. so bushel in the principal
| market. But how inapt is the comparsonl
In 1898 there was the fortuitous and alto
gether exceptional coincidence Of large
harvests in our own land and poor harvests
almost everywhere else on the globe; 80
that we thus exported at very high prices
an enormous quantity OF grain. Circum-
stances to-day are totally different. The
present promise of the wheat harvests OF
the world Is that these will be somewhat
| below the usual quantity, although
large in certain sections, insuring
fair export demand for our own food
| stuffs II prices about the usual range
or a little above 1t were to hold. But the
| food importing countries are by ne means
In suctsneed Of bread that they will be
willing n, pay the price for wheat which
the American farmer now asks. They can
obtain from other countries, notably Argen-
tina and India all the wheat they desire
at what they consider a reasonable cost.
and in the last few months wheat prices
abroad have only in small degree followed
the advance scored here. And here is
the cruz OF the entire situation. Such