The Cairo bulletin., 1906-10-29

new YORK, Oct. 2S.-lne world
money markets continue to show
stringent tendencies. In spite of thu
large increase in the worlds supply oil
gold during the past year all the
great financial centers are eagerly en-
deavoring 10 strengthen their re
serves The reasons for this, of course
| are obvious. There is a worldwide ac
tivity and expansion. Europe, es
pecialy England and Germany, is I'M
dergoing a period of Industrial and
commercial development eofewhai
similar though less extensive, than
our own This increase of activity is
NOT confined to the leading CONNER
cal countries. Even in Asia there is a
great awakening. China, Japan and
India are experiencing new growth ;
while Australia New Zealand, Africa
and anada are also expanding wonder
fully. The only nation on earth at
present at standstill is is Russia,
which Is groaning under its terrible
struggle for political freedom.
Such worldwide activity is, of
course, the result of progress, inven-
I ton, discovery, growth OF population
| and the development of productive en-
terprises. II has been unquesJionably
more marked in the United State9
than elsewhere, owing to our marvel
Gus resources and the tremendous ac
Itiyity Of an energetic and wealthy
| people. These extraordinary move
ments naturally impose a strain upon
banking facilities the world over; the
worlds supply of gold evidently being
/ insufficient for sustaining such abnor.
NAL activities especially as the high
range of values seriously diminishes
Its capacity for credit purposes. In ad
dition to the latter demand there is
apparently considerable boarding of
gold in some quarters, or the de-
ficiency in supply would not be so
acute | am inclined to believe that
gold is being more freely used than
ever in the arts, and attribute much
Of the deficiency to the increased |
boarding of gold in the Oriental coun
tries; besides the wider adoption of
the gold standard requires more to go
the rounds. No doubt all of these in |
fiuences are at work, but definite in
formation as to their extent is, of
course unattainable. Another element I
of strain is the great waste of capital
resulting from the Boer and Russo
japanese wars. So far as the United
States is concerned, the supply of
gold in this country is materially |
larger than year ago, and would |
probably be quite sufficient for all |
ordinary purposes were it not for the
demands Of epeculation. On July j,
1906, the stock of gold in the United
S ates was estimated at over S305I,
100000. an increase of so per cent in
ten years; yet the strained condition
Of credit in this country is the most
significant feature of the day in
financial circles. We have practically
Used up all our floating supply of CAPT
al; and the nations savings are
being rapidly exhausted by extrava-
CANT living and heavy expenditures.
N short, it is time that halt be made
II the demands upon our credit sys-
EN- unless it is to break down from
)yertension. The only true remedy
or the situation is the liquidation of
excessive speculative commitments.
That there are spots of unsoundness
iere and there in our industrial and
financial fabric arising from imitation !.
# values is beyond question. The !
of these would be whole
ONE and would strengthen the gen /
raj situation. One serious difficulty,
however stands in the way of
atural rectification; that is the spec
lative attitude of certain of the
lrgest interests in the market. Some
f these are carrying large amounts =
{ stocks, which they are determined =
0 hold for high prices. SO far the in
esting classes and the speculative
ublic have refused to come to their
ssistance; because the present high
9vel of prices is not sufficiently I
empting, even considering the rumors
f increased dividends, which have o
lready been so fully discounted as to Q
ow, at last. fall absolutely fiat upon z
The power of these o
ig leaders over the market is I'M s.
fashionable. and the fact must be o.
ackOned with that these parties will q
ndeayor to sustain the market
gainst any material decline: hoping It
find a sale for their surplus securi.
es later on when the money market
Id political conditions are not so I'm
vorable as at present. n
The immediate outlook for the mar ii
et is unsettled Money rates con g,
nue. high and may remain 50 until k,
ter the new year Prospects for get Ia
ng further gold from abroad are 81
wv very limited for reasons already n
iderstood, and little further assist tn
ICE can be expected from the treas re
y unless in anticipation of bond is
lrchases for 1907, or by placing the an
naming treasury surplus in the de- HI
,sitory banks. Neither Of these re- tn
urces is very important. and it on
ems quite probable that the market of
II be largely obliged to take care of pa
elf As a matter of fact. moderate of
lt1idatioD would no Uholpeorna and L.