The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1905-09-23
The Financial Trend,

Readers who follow the financial
trend will remember that about year
ago a great outward movement of gold
was on and the yellow metal was leav-
ing the country in quantity. Comment
was then rife as to the probable effect
upon securities prices, and it was de-
pressing influence, for, as rule, when
gold goes out prices fall, and rise when
it comes in. The stock market watches
the movement closely, and often turns
on reported importation or expectation
Of any considerable sum. ~"
Extraordinary considerations entered
into the situation during the last move
ment, considerations that were in mind
for some time before they began, to
work into actuality, hence when the
gold began to move, the effect was
much less than might ordinarily have
been expected, and altho $79,000,000
went out to Europe last year, anticipa-
tion has robbed the attending circum-
stances of their ordinary effect. It was
known, for instance, for some time in
advance, that the Panama canal pay
ments would, call for gold, and there
were also the shipments of gold for
Japanese account, to London. Never
theless, the cash holdings Of the New
York banks fell off by $40,000,000 after
mid-September last year.. rvs
Today the situation is as different as
possible. The steamer Kronprinz Will
helm landed parcel this week, and 9th
er engagements are reported, and it is
predicted that between $l5, 100000 and
500 100000 gold will come this way
within the next six or eight weeks.
Exports Of commodities and of manu-
features from our country have been
heavy, and of nature to draw gold,
cotton figuring prominently. But q
condition has developed in which Eu-
rope owes much more money on short
time account to America, than America
owes to Europe. Exchange rates favor
the shipment of the metal this way, the
European money markets being affected
somewhat in favor Of America, by an
accumulation of gold at Paris, said to
approximate $6Oo,000,ooO. Paris is clos
est to Russia financially, and during the
period leading up to peace, and thru
the uncertainties Of the conference,
French bankers boarded gold in antici-
patton of an indemnity payment, in
which they expected to figure. There
being no indemnity to pay, there is not
| the occasion for this accumulation, and,
as fast as conditions make it profitable
to sell it in the open markets, Paris is
willing to let go. .->
On our side Of the water the inter
est in this movement is in the impor'
tant effect it has upon the money sup
| ply. This is the season when much
money is needed to move the crops. It
is true that of late years the crop-pro
ducing west and northwest have beer
so independent that bankers here nc
longer hang upon the situation in New
York as influencing their actions. New
ertheless the money situation east il
of prime Importance to all. The out
look now is that the exports Of floul
and grain will run heavy, and that con
ditions sfavoring gold movement tt
our side will exist for some time. Thi:
will be a fine thing for the whole
country.
| One element of danger appears. Wal
street is always ready to bull stocks
Nothing facilitates speculation Xix,
cheap money, and nothing so much in
sures cheap money as importation o:
gold. If Wall street would be conser
vative all would be well, but conserva
tism is no part of the speculative make
up, and the element working for biz
bull campaign, with the favorable con
ditions now shaping, may run price
| to dangerous levels, inviting later sud
i den and severe reactions. -, ~. ~,.