The Cairo bulletin. (Cairo, Ill.) 1???-1928, 1906-05-07
RETURN TO LEVEL
More Natural Since Wave Of Liquida-
tion Struck Wall Street Like
Cyclone.


1 Special Weekly Letter
! New York, May ga fresh wave OF
liquidation of almost cyclonic proper
tionG struck Wall Street this week
| Conditions were more or less unsettled
by the San Francisco disaster, and the
opportunity was seized to enforce some
rather drastic liquidation, which fell
chiefly upon few prominent and rath-
er TOO optimistic operators. This last
| decline in the market resulted in a
| drop Of from 10 to 80 points in many
/ of the active shares. inhicting severe
! losses in quarters which were fortu
nately able to stand them, In spite of
This rather unusual break there are no
rumors of serious trouble a this writ
ing. and the financial atmosphere ap-
pears to have been much cleared now
that the storm has spent its worst
force. AS has been repeatedly init
mated in these adyices, it was the
monetary situation which furnished
the instrument of power for the bears.
Had il not been for he'large demands
oyertaXed money market no such en-
forced decline would have been pos
sible Fortunately, We were able to
secure material assistance from abroad
and thus mitigate the force of the
blow Some S30,000.0 600 of money has
been RENTED TO San Francisco and
over forty millians of gold has been
ordered from Europe being made inn
mediately available through Secretary
Shaw's leniency in deposting treas
ury gold in return for bonds as collat-
eral Much fthe money sent TO San
Francisco to strengthen local banks
and precent panic will soon return in
to the customary channels of circula.
ton, so no further serious difficulty
need be apprehended from Pacific
Coast monetary demands, although
this catastrophe will be a factor for
some time to come.
Much relief has been furnished by
the attitude of the foreign markets
towards American eecurities. Over
there confidence is evidently still
strong in American Investments |
Large quantities of securities. espec-
tally bonds, have recently been sold
to foreign purchasers. this being par.
t1cuiarly oportune since our own mar |
kets are much weighted with enw
bend issues. which are slow of sale in |
a 512 to 8 per cent time money mar
let. 1t is quite possible that further /
gold imports may be necessary but n
American credit is in good form, and
he activity in trade and industry in
'ures a large and legitimate demand
or money Recent liquidation and
over prices for stocks are not only a II
eiief to the money market but secure
genuine Improvement in financial II
conditions. Under such circumstances Il
europe will undoubtedly be willing TO
end in the event of our requirements
icing urgent Now that the Russian
oan is out of the way funds, held 10
insure the success of that operation
viii be gradually released and the for
ign situation helped thereby. The
dvance of the Bank of England rate
0 per cent which was due to the
exceptionally low condition of its re
erve, is, of course, a warning that
old will not come easily Neverihe-
ess, il Is quite certain that if the
american markets need the precious
metal they will be able to secure it.
recent liquidation in the stock mar
et ought to result in a material con-
raction Of loans, and thus strengthen
he position of the local banks. since
hey have been enabled to largely {
hif San FranciscO's demands upon
Europe. Insurance companies have
ot yet begun 10 pay their losses with
ny freedom, These amount to some
ghere around $150,000,000, and Will,
e gradually paid, The effect of this
as not been fully discounted on the
took market, and further sales of
Investments must be expected for max
ng good this enormous loss of prop
rty
II is perhaps not sufficiently real
,ed how great the decline in stocks
as been. Since the high prices of
905 many of the active shares have
eclined from 30 to 80 points. This :
) a tremendous shrinkage, amounting Il
D probably one thousand millions
hat such a contraction could take
lace without involving a single failure
'orth noting is remarkable testimony
T the inherent strength of our finan-
lal situation. 1t perhaps can no long
r be said that stocks are tnduly high
D long as industrial and commercial
ctiviiy continues At it, present level.
ecurities have certainly receded TO .
lore natural level. and liquidation If
ontinued, should follow. in other quar-
rs where no recession has yet taken {
lace after abnoTamlIy high prices 6
peculaiion in real estate is still go
IL on al a threatening pace. which
annot be indefinitely continued Many
-mmOdities especially those in the
letallic industries, are also selling too :
Ugh for stability. and reactions would
p beneficial Prices all round. costs
living. wages efc. are too high