New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1905-10-12
WALL STREET WARNED.
Continued from hrst page.

tics show tna beginning OF this now Oo4s-
reveal the possibilities of future successes Our
Ssat os Sf Of uxope contrasts striiny WITH
the tariff hampered field of European rnanufaotur-
ers. Our foreign competitors meet at every turn
the obstacles os customs restrictions OF Taola
NEUTRALITY-SUSPICIOUS. market of ours makes solid founda-
ton upon which industries can STAND wis Wits
they reach out successfully into compstltlve neos
The conquest OF foreign markets will not 90 an
easy one however We are likely to meet Wiz 19
failure TO give proper attention to the business ness
or caused BY a combination of obstacles which we
cannot overcome. Perhaps We max see nan an S1 81
Is BY certain that Japan is 10 STAND coua
ps2ns as TO ene we have seen in China what
q racial boycott do in interfering with trade
something TO be striven for, and there will be
difficulty, defeat disappointment ano d, I se
the asking. The obstacles of tariff walls grow
Inents The ability TO compete with us increases
methods are better comprehended' Ger
education Of The Industrial classes that we may
lose at times from that cause alone , .. nc
do that advantage is TO come 70 US
through disaster 10 others. we nave peii fs
there seems, at the moment to be good measure
throughout the world me world mas W ti
the financial strain Of war. which cost the com
blatant nations two billion dollars; ~ mas VIII
how it has been possible that such disaster
should have produced no more unIoTtunaIte reSut ~
/ believe the answer 10 that should be looked Tor
In quarter which our academic friends nave
vet come fo excite very great interest among prac-
tcaI fnsnciers- It is not alone TO the Taisers OF
mines Of the world have been yielding treasure as
lsyishy as hsEe our n e5of feast days HOLIDAYS and
S1n6sy-s there will be drawn from the ground a
od d1Ts OF pem nv 6eTe vii be number Of
cd millions TO spare above that average,
GOLD PRODUCTION FOR 1905,
The mines Of the world will produce this year $50
oe9ooa Of gold, The final figures for the production
sooied ssE7o 900 We may reasonably look forward
szo 1900 of new gold for at least considerable
number of years. When we remember that in 1883
Sin to set comprehensive view of the significance
q this increase When Te Tenenlper turtneT I ha
about S57oo00O0O0 we calculate that the output
60 equal total great the present monetary
stock Of gold. These figures are startling. They
perhaps suggest the possibility OF a disturbance OF
values It does not foley. OF course that WIN IN
mo Stocks viii he increased by that amount
The uses of gold in the domestic arts draw OFF at
$500 100000 year to add 10 the gold reserves. So
erninent an economist as Leroy Beauheu mas estlI
be doubled in twenty-five years. In the light of
no doubt that he would modify that estimate and
incline to the view that the monetary STOCKS Will
what is this to mean TO the business situation?
no longer academic questions They are pracucal
80 ,roduc+ioT which has been in progress since
The close of the Boer war has in my opinion been
factor in the rapid recovery from the depression
cal excuses and indiscretions. we had been led
into DANGEROUS position In Egf0Pe Siso on fa
occasioned by that everywhere manifest.
This new gold PrGdncon POURING Ia BEEN s s n G
IN bringing about the quick recover from dePIes-
destruction of capital which the Russo-Japanese
The Classical economists. Ricardo Adam Smith
and Mil, evolved the quantity theory Of money:
existence
money stock were doubled, prices would De
would be cut in two That theory has been proved
TO be Inadequate There are many o9neP ite Ie
ertheless there is economic truth and force IN IL
that II our bank reserves are iCIsaSe 1850 . an
moved to increase our loans. A pressure 70 Il-
i ssnrifes thinS everv one viii accept sub
5ect to important modifying conditions. the state
Tnent that increase in the monetary supply mas
tendency 10 advance prices There may o9
result Te6s can 6 6g r9 OF aoq gold ssa 10 be
bank reserves of the world there is disposition to
IN turn has its influence on the side of advancing
prices As practical matter, however, do not
result Of this Influx of gold We must remember
even run ahead Of the substantial growth in the
gold reserve so that In spite of actual Increase
The relative percentage Of gold reserves to credit
demand would leave prices unchanged
THE INTEREST BASIS
set it must be admitted that it is not for ac-
ourate calculation and definite conclusion. There
few considerations however, and some pop
l1sF rntsaPprehensions IN regard TO 1t eonGern!ng
For example, ii is rather commonly said great
increase in the gold supply will bring US to per
caption 1t IS true that the first effect of gold
additions TO bank reserve will he TO lower the in
tscest rate. That effect, however is temporary
When the money supply has reached permanent
Jewel, matter how great the increase IN it has
been the interest rate other things remaining IN
changed, will find its regular level. Interest is
in q de-
preciatess the value OF interest payments depre-
piates as well. We need look for permanently
lower basis result of an increase in the money
SHOCK but while that increase is IN progress the
reserves are being constantly augmented and the
tendency would be toward lower rates.
There IS another consideration which should
ment ali other influences may lay down the
principle that an increase in the supply OF money
but the price Of an obligation repayable in money
VIII not tend TO advance That IS to say, real
estate and al forms Of property, including shares
Of corporate stock which represent an ownership
in real property, would advance, but bonds which
represent only the right demand q payment in
fTn6Dev vvouId moi advance All rersoDs having
that income reduced. The return from mortgages
and bonds would have reduced purchasing power.
Persons receiving fixed salaries and wage earners
generally would be at disadvantage, for their
Incomes would not tend to increase as rapidly as
the purchasing power Of their wages decreased.
Under such Of circumstances there would
70 increase their incomes to keen pace with
the advanced cost Of living, Is not that exactly
what we have been seeing and are likely 70
see more Of that same PIX ssure TO advance wages
SIS the cost OF living advanceE2
These ers tendencies which would become sharp
" manifest II there were not counteracting infI-