The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-08-14
THE FINANCIAL SITUATION.

and almost paradoSically month when
Wall Street absenteeism Is at Its height
and when the stock market Is relatively
active. The reason for this Is well under
stood. In August the midsummer vaca-
ton taking Is most pronounced and fewer
people are in Wall Street proper than at any
other time of the year. Such circumstance
would, II unaltered by other conditions.
clearly make more fer dulness than any
thing else in financial affairs. But August
Ia really the greatest formative period OF
the year in stock market sense. In August
the probable size Of the seasons crops
gets to be pretty we'll ascertained. that is
to say, Vows clarity the probable nature
Of the one great event Of tho year so far
as the stock market Is concerned. In May
II Is known in what shape the planting OF
the crops has taken place; In August IT 10
learned not positively but with reasonable
surety what the outcome OF the harvest
will be. The stock market proceeds, there-
fore, on both these occasions, and to
greater extent, naturally, In the last named
month than the former one, to discount
the knowledge that 1t has gained. II Is
perhaps needless to refer to the character
Of this years discounting. a. It is now 60
ing on. It is almost certain TO be'the fact
that the years crops, taken in bulk and
considered also from the point OF view
OF money value, will be the largest IN the
oountry's history. With much the largest
corn crop, our most important article OF
staple consumption; the second largest'
and It may be the largest. wheat crop;
bumper yields OF hay. oats and all the
minor grains, with only cotton showing
a falling of, but the loss here greatly com
pensated for by the price OF the staple
and by large reserve stock In producers'
hands-can there be any wonder that
boom has started In Wall Street. where
the keenest minds in the land are on the
alert for signs, good or bad, regarding tho
business future? It is alwas 8 well OF course,
not to be too hopeful and to err on the side
of caution rather than on that OF optimism;
but 1t must be said without reservation
that IL present indications do not point
to banner business year in the next twelve
month all reason and experience are at
fault and we should give up the study OF
indications altogether. Not only Is the
crop prospect magnificent, but the iron
and steel trade, the backbone Of the coun-
try's manufacturing industry. Is perhaps
In the most healthy state in which 1t has
ever found itself. The copper and all the
metal trades, the lumber, textile and shoe
manufacturing businesses are all IN the
stron gest position. The labor outlook was
never better. The great crops now before
US mean that to all this prosperity another
vast increment Ia to be added. The rail-
roads will not only be willing but will find
1t necessary to plan large expenditures
among the iron and steel factories to &C
commodate the new business that will
offer. and there is a not a business or a
wage earning individual In the land that
will not be favorably affected by the pres
ence Of the great amount OF new wealth.
taken on: OF the ground.
Looking back somewhat from the I'M
mediate question OF the crops, reference
must be made, even at the danger OF making
tedious iteration. to one or two underlying
causes for the present financial status and,
specifically, for the ruling high prices OF
securities. 1t began to be evident to close
observer. even before the beginning OF the
war In the Transvaal that a vast change
was making in the worlds economic matters
on account Of the increase in the produce
ton Of gold. A gold imitation OF values
was taking place owing to the decline In
the purchasing power Of gold caused
by the charging quantity Of the metal.
This was halted in some degree by the
stoppage of supplies from the South African
mines at the time Of the war; but now that
these mines are again open and are pro-
ducing to their full owing to the employ
-,ent of efficient labor the gold production
is again approximating record figures.
The worlds finances and security prices
are, in plain words. exhibiting the effect
of an output of new gold in the last twenty
wears equal to all the gold that had been
produced before that time In the worlds
history as far back as the discovery OF
America. Gold is worth less than 1t was
before, and it takes more gold than 1t did
to buy commodities and securities, that is
to say, the price of commodities and securi-
ties is rising, and as not only the Rand
but our own and other countries are
largely increasing their gold production
yearly no end to the process of imitation
thus described can be said to be in sight.
A second cause Of almost incalculable
potency behind American prosperity has
been the increase III tne COuIlJI . POpuld-
ton and the radical change for the better in
the condition of the American farmer.
The increase of the population Of the world
and Of our own country in a ratio greater
than the production Of foodstufrs has made
these foodstuffs worth more than they
were formerly and has caused the farming
occupation to be correspondingly more
remunerative. The result has been de-
velopment of our Western section I'm
paralleled by anything that has ever taken
place before in any land. There has been
a paving of OF debts and an accumulation
Of money in the West whose beneficial in
suence has invigorated the nation, and its
results are most apparent though not per-
haps greatest in the growth Of the Western
cities and the impetus given there to manu-
featuring and to allied industries. Here
again the change appears to be OF per-
manent nature There is no more new
farm land to be brought under cultivation
In the United States and no way In which
the agricultural area can be increased save
by irrigation a little but not much new
-soil' is to be found in Canada. Com
paratively high prices for wheat and corn
therefore, will probably rule. a. they have
done for the last eight years, and the