The Washington times., 1906-04-15
HENRY CLEWS
FAVORS CAUTION
Money Conditions the Dis
cOrdant Note.

NEW YORK. April 14-On Wednesday
the announcement was made that over
s6.O00.0o of gold had been engaged in
London for this market. the result be-
ing an immediate drop In money rates,
and corresponding Improvement in
security values. This development I'm
connection with the fact that funds
will soon be returning from the interior
more freely Impaired a more confident
feeling regarding monetary prospects
The later outlook. however. Is stin one
requiring ~,ase attention. II spite OF
the large increase in our currency sup
ply we have been turning aoating capi-
tai into fixed forms too rapidly The
nations savings are being too quickly
exhausted. Large sums are locked up
in speculation. and legitimate demands
continue very heavy. owing to the i'm
mense volume OF business and the high
prices of commodities OF course only
a small portion of the business of the
country is done through an actual trans
fer of money-probably not more than
10 per cent-the balance Of the nations
transactions being effected through a
mere transfer OF crefits by checks.
Nevertheless. our currency supplies
have been pretty thoroughly exhausted.
and bank reserves are at a remarkably
low ebb. There are three ways of re-
plenishing the latter. First, by the re-
turn movement from the inferior: sec
ond. by gold imports. and third. by liqui-
dation- The latter IS the most unwel-
come and yet the inevitable IL the other
two sources fail.
Apparently the present crisis in the
money market has been passed. and
easier conditions may now be antici-
pated until the demands Of the next
harvest begin to make themselves felt
How much further relief we may be
able TO secure from Europe Is some
what probleTnatical. The European
money markets would ne doubt be will
Ing to expand their American credits
or 10 let US nave a reasonable supply
or gold; but the settlement Of the Nor
ocean problem, having removed all
probabilities OF international friction.
at once resulted in unusual demands
upon Foreign banking resources which
were fully expected The new Rus
sian loan is now anticipated at the end
OF the present month, and II is ru-
mored that an amount OF between
sS00.Oo0.0O0 and $500. 600, geo will be
placed on the -nsrAet at about 90 with
per cent rae Of interest These
terms indieat. great need on the part
OF Russia, hut they are inviting
enough TO attract a large Offering.
Germany has already placed a $3.50
100000 loan, while important new is
sues are also anticipated in London. II
IL be remembered that business on the
Continent and IN Great Britain is more
active than usual and that a large
amount Of other new security issues
are expected, II will be seen that the
demands upon the foreign money mar
kets for the balance of the year are
sure 10 be heavy, and must therefore
interfere with the freedom Of gold
shipments to the United States.
Apart from the monetary situation the
! home outlook is satisfactory. No in
terruption has yet occurred in the large
volume Of business In progress, and
none is in sight. The great coal strike.
which has seriously threatened disaster.
IL is hoped will be adjusted before very
long In consequence various Industries
dependent thereon have taken a. fresh
start Numerous orders for iron and
steel. held back on account Of the coal
strike. have been placed. and that i'm
Z
the high tide OF activity. The March
output of pig iron was a record-breaker.
and production is now running at the
rate Of nearly 100000 tons per year.
Numerous 'quantiS - structural iron
are being turned out. largely for rail-
roads, which are doing an enormous
amount OF reconstruction as well as ma
terially increasing new mileage. Real
estate Ia@ 1
factor in the iron market. commitments
OF this character having already reach
ed 10000 tons for the city of New York
alone The season is starting favorabIy
for the crops. The last monthly report
OF the Department OF Agriculture on
winter wheat gave a condition OF over
" per cent This, while about points
lower than a year ago, is much higher
tnan the usual average. and at least in
dicates a big crop.
Railroad legislation now attracts liz
tie attention on the Stock Exchange,
since IL Is quite apparent that nothing
radlcal or unjust to the railroads is
likely tc pass at this session. In a few
weeks Congress Will adjourn, and no
further disturbance from political
causes need be anticipated until
| the opening of the political campaign
IN the autumn. All outside conditions.
therefore, favor the stock market The
4
the money situation The nations sur
plus savings are being rapidly ex-
hausted. New securities are being taken
at a rate which threatens serious con-
gestion unless checked. One authority
estimates that s1.476, 100000 securities
nave been authorized in this country
since the first of January. of which
l,l93, 100000 have been. or will be. issued
in the near future, $246, ,0o0, 600 being for
refunding purposes. The March bond
sales amounted to over s20.ooo, 600 being
the largest of any March since 1882.
Imp artant additional issues of railroad
shares ere also about to be made These
conflicting conditions f0.or a good trad
ing market, for while prosperity con-
tinues there is little chance of a serious
decline at present. On the other hand,
while money continues so scarce there
| is no opportunity for any excessive bull
| movement We may expect frequent
rallies, based on encouraging outside
conditions and the fact that large hold
ers are interested In higher prices. In
all directions prices are exceedingly
| high, too high for permanency, and
| moderate recessions In both cOmmod-
tiles and securities would be desirable
and wholesome.