The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-03-20
THE FINANCIAL STTUATION.

| 80 far az the stock market itself was
concerned, the Developments Of most In
! terest last week we're the greater degree
! Of frmness In rates for the use Of call money,
| the lessened activity OF the bond market,
| the evidences OF a relative concentration Of
| the movement for the rise In prices I'm the
/ fore part Of the week and the rather general
| declining tendency at the close. Pertain
| ing 10 general business Affairs, there was
no break In the buoyant and optimistic
| reports that have been 30 long received
! With the exception Of heavy rains in certain
portions Of the West and Southwest which
caused foods In 5outhem California, the
weather everywhere was mild and wholly
! favorable 10 business and agricultural
operations, 30 that railroad earnings for
the first part Of the month made almost
universally gratifying comparisons with
those Of February. The outlook for the
spring trade continues promising, and mer-
chants say that present stocks Of goods
on their shelves are not large. Tie iron
and steel trade keeps at work on a produc-
ton which bids fair to push the years
record thereof to a new maximum. We
are coming 10 a time when the state Of III
crops will rank among the chief infuen ces
affecting values and while il is too soon TO
speak definitely about the winter wheat
crop, all that has been made known thus
far In regard to It is unwontedly encourage
ing. Matters like these, however, do not
solely determine the market prices OF &C.
curitieH, and therefore Wall Street was
more interested last week in the appear
Rnce of certain new features in the strictly
speculative situation than In the continu-
ance Of the monotonous even II splendid
stories Of prosperity from the country at
large. Il has been noted that money rates
have become somewhat firmer. This re-
mark does not apply TO time money rates,
although, Of course il call money should
become very strong, time money would
follow il in degree. As to why call money
has hardened IL is only necessary to glance
at the present figures Of the surplus reserve
Of our local Clearing House banks and to
remember that this is a time Of year when
in the past interior institutions have not
only drawn down their balances here, hut
have even asked for loans Of money for
the purpose Of accommodating the financial
needs Of the farmers in the spring planting
season. Banks at this centre are plainly
in no such position TO withstand this
customary drain as they we're at the same
time last year OF as they ordinarily have
been in the month Of March even allowing
for the wealth Of the West and the prob
ability that requirements OF the Western
banks this spring will not be as large as
they have been in former seasons. In the
corresponding month last year Stock Ex-
change transactions were almost at their
minimum in this generation. This year,
during the usually dull and stagnant months
In ha hn
speculation in the history Of the Stock Ex-
change has been in progress, which has
expanded loans on speculative collateral
to an unprecedented total and elevated
security prices TO a level that represents
a gross valuation Of property hundreds
Of millions Of dollars greater than was
the case a twelvemonth ago. Our bank
ers, in addition, have subscribed freely
10 foreign loans Of all sorts. which. com
bined with the falling of in our exports
and the huge increase in our imports
our foreign trade balance having decreased
3ll2,OOO,OOO during the first eight months
Of the year-have caused Ne 70 export gold
in large quantities 80 that our supplies Of
cash have been cut down. It is not to be
wondered at, therefore, that the first Of
April should bring at least its accustomed
tors who have been so familiarized TO the
Use Of per cent. money that they cannot
how a higher rate should prevail
for little time and find that this fact spells
danger for them, they are sincerely TO be
pitied.
The most important consideration Of the
moment is how high these rites are likely
TO go in, say the next month or six weeks
or until the normal time for the beginning
OF the return movement OF money from
the Western farms. At 81 or 4 per cent
the trust companies, private institutions
and other non-reserve keeping lenders are
putting out money freely. and
this will serve to reduce national bank
loans and ease the situation. The rise
In the value Of money, too, will weaken
sterling exchange, as il already has done
and bring offerings here Of European funds
Yet our best bankers at the close Of last
week we're inclined TO raise their previous
estimates Of the point that money rates
would probably touch in the near future
and the length Of time this rate would hold
-Four per cent. two weeks ago was the limit
prophesied by these gentlemen. Six per
cent. was the figure named by them at the
end Of last week-ahowing how quickly
these matters change, and suggesting
whether an even higher rate may not eventu-
ally be named OF reached, There it, Of
course, nothing in the rate that has been
specified to disturb any business man, OF
nothing about II that can be called alb
normal or strained, OF a. partaking in any
way Of money stringency. The only
question Is, whether such rate would
appreciably affect the stock market for
technical speculative reasons, and Of this
every man interested must judge for him
self. The problem Is complicated, not only
by the movement Of money 10 the West, by
the fresh japanese borrowings that are
impending, by the Pennsylvania Railroad
Company's forthcoming bond issue Of
500 900 and by the numerous demands
upon our money market by various large
corporations that are known 10 lie near at
hand Having direct bearing on this mat
ter also Is the large carrying over" Of cot
ton into the next season, which our South
em planters have manifestly undertaken
Trustworthy calculations as 10 the amount
Of c~tton thus held for higher prices mt tho