The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1906-12-14
MONEY. STOCKS AND BUSINESS
The Outlook still Encouraging, blu
- Caution Necessary

The Outlook still Encouraging, nut
Caution Necessary
Henry Clews. the Wsll-street banker, issues
the following review Of the current commercial,
fnsncial snd stock situation:
There has been some talk of renewed Amer
lean purchases Of gold in the London market
such reports. however. are premature. and gold
shipments will surely meet with renewed re-
sistance on the part Of the Bank of England.
Notwithstanding its recently strengthened posi-
ton Scramble for gold is not confined TO New
York. but exists in al the principal money
markets Of the world: 50 New York will only be
sble 10 draw fresh supplies at the expense Of
unusual pressure or injurious rates OF interest.
Both the Bank Of France ana the banA OF Eng
The monetary situation is further compli-
Gated by prospective security issues of our
railroad corporations which have been pre-
srrb5son authorized SOS 600 coo additional Sc
curities and Norfolk and Western Sl4.5O0, 600
Other companies. such as ST. Paul. New YORK
Central. Great Northern and Northern racine
will also come into the market Tor large
amounts Of new capital at the first opportunity
Their requirements are imperative, being needed
commodate existing traffic more than for the
development OF new territory These new de-
mauds, coming ST time when the money mar
ket is already overstralned. portena continueo
tension. How long the struggle between Nigh
Tinue remains 10 be seen Much depends upon
the strength Of holders Of stocks. As is wen
known. securities are at present strongly con-
ceutrated in & few hands at very high prices
TWO WAYS OUT
There are two inevitable ways OF breaking
the present deadlock: Either stock market values
must recede and permit reasonable liquidation,
OF borrowing rates for money viii soon reach a
prohibitiEe snd injurious level. Just when or
where the breaking point VIII come, ana MEOW, now
which only time can solve Very shortly prepare
lions for heavy January disbursements viii be in
order. and these Will cause temporary disturb
ance Call money continues TO command almost
eEorbitanr rates on the Stock Exchange ana
there is little prospect Of substantial relief
agreed 10 release $1,000, coo On December 10
u anticipation OF lntsIesl pc. Den.ss ~ LIE
lie Will make further efforts az relief Since
the treasury is steadily accumulating funds ow-
ing 10 heavy receipts, the Secretary is justified
IN counteracting-by ell legitimate means-the
injurious operations OF our present treasury
II the enormous increase in the supply OF
money bank reserves are exceedingly low and
Is again making heavy demands upon the New
York banks II is true some of the interior
banks are lending more freely IN New York. but
the one movement seems 10 be onset by the
THE GENERAL OUTLOOK
The general outlook remains unchanged
Business is active in ali parts OF the country
and speculation is fortunately restrained by the
unusual rates for money. check TO the min
lures Prices Of commodities are high and
seem likely TO 50 remain. in view OF rapidly an
cre8slng costs OF PRODUCTION IDeIe are. now
ever. signs Of any cessation in the demands
for merchandise. and supplies generally are
light Our iron and steel trade continues TO sur
prise even the most optimistic by its activity
and strength. When the limit OF activity and
advancing prices viii be reached no one can de-
termine. good many shrewd and experienced
observers are Of the opinion that we on the
verge OF recession Some, however. are conf
dent Of another years good business, and point
with satisfaction 10 the unfulflled prophecies OF
reaction which have been current for year or
two. In my own opinion. If securities and
money could only be restored TO e more nor
NAL basis allowing for the fact that we are
now on q higher level than five years ago. we
could feel practically assured OF another twelve
months of good business-provide crop dis
aster interviewed So long as the money situa-
ton however. remains il now is, the eau
tiOnary signals must be kept prominently in
debt -