Las Vegas daily optic. [volume] (Las Vegas, N.M.) 1880-1908, 1905-10-25
NATIONAL CONDITIONS.

Henry Clews says:
Cauilonary signals are up In Wall
street. and this In spite OF exceptional
~ brilliant business prospects. Both
money aud foreign exchange have cd
yanced. and firm rates are likely TO
continue. The significant feature Ct
the situation Is that this tension In
the money market Is not coaiiaed 10
New York. In all Of the world 5 prin'
cipal money markets rates have ed
yanced, and those who hold the reins
OF finance are manlfestlng Ar In
creasingly prudent spirit. Interest
rates Al New York. London. Paris
and Berlin have practically doubled
since the opening OF September, and
the various international money mar
kets are showing a disposition TO in
crease their supplies OF gold at the
expense OF each other. Bank re-
serves AZ New York are al the lowest
point within a dozen years. save In
one or two monetary periods. while
reserves Of the great foreign banks
are also lower than usual and their
, managers openly recognize the neces'
sity for caution.
What Is the reason for this world
wide policy OF prudence at a time
when the business horizon seems
cloudless and all other signs point 10
continued fair weather? Simply this:
That the demand for capital has out.
run the supply, reserves are depleted
and 1t Is at last evident ,nat new i'm
portant requirements a only be met
at the expense Of those less urgent.
THE world has been turning floating
capital into fixed form too rapidly,
and the only course open Is 10 walt
for suitable readjustment, either un'
til II flows back into its actual reser'
voirs-the banks-or else through the
unwelcome process of liquidation. OF
course the chief reason for this state
of stringency Is the unparalleled and
universal business activity, which
while most conspicuous in the United
States, extends also TO Great Britain
France. Germany and other great
commercial nations. Added to these
demands for money. which have been
materially augmented by the high
level OF values, are the effects OF the
Boer and Russo-Japanese wars. These
conflicts have wasted hundreds Of
millions OF capital. which can now be
fairly measured by the enormous ma
ltional bond issues Of the last few
years. Very likely these drains upon
the floating supply of capital could
have been met without difficulty had
lit not been for the extraordinary ac-
tivity Of business; but the sensitive
ness of the various money markets
to current operations connected WITH
the Japanese loan and the prepare
ltions for another large Russian loan
demonstrates that the worlds money
markets are at present unable to re
spond to any further large demands
IOI tllN SOit. III di SUM- ~ 1ro ~
the present, legitimate business de
mands insist upon the first consider
Iation, and speculative commitments
have To be set aside or postponed
This Is as il should be, although the
consequences are apt to be uncom
Portable wherever transportation
exists. Fortunately, the general fl
nancial situation Is sound. Weak
spots could no doubt be exposed here
and there In the course of liQuida
ton. but no great overriding is like
lily to be discovered so far as can be
ascertained through current develop
ments. 1t Is extremely fortunate that
no hints OF unsoundness In our grea'
life insurance companies have come
to the surface during the recent mel
ancholy disclosures: which revealed
extravaganza and gross Improperly
In management, but no impairment OF
financial strength.
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