The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-07-09

AAoAS1y OA@NI
therefore moves lie plant and BY means
Of the accommodation that IL has secured
80 increases lite business that its wealth
In the ten years described becomes more
than auadrupled, while the little town
where the new plant wal put up becomes
a great manufacturing centre and tho
dividends Of the railroad company N
swollen. The agreements by which al
this was accomplished were technically
under the ban Of the law. But who shali
say that such agreements were not wiso'
and what business man 10 there that does
not know understandings Of this sort have
to be arrived at II the growth OF the ooun'
try 10 to continue unhampered2 In the
case Of our railways at present the theory
OF the law seems to be to endeavor TO on"
force competition among them; and yet tne
laws forbid them, practically, to compete
with ZACH other in the matter OF rates ana
to avail themselves generally OF the means
by which competition takes place. Ihere
must be an end some time to agitations
for Government inspection, supervision and
control Of the private business matters
which limit profits, but by no means guar.
antee to make up losses. II we are not
to look forward as the ultimate end OF
these matters to Government ownership
OF business itself.
Among large bankers there has been no
doubt recently a disposition TO postpone
commitments and ventures OF q
nature on account Of the uncertain state OF
the money situation. The concrete facs
here js very clearly that the supply OF lend"
able capital in the country 10 for the time
being insufficient to meet b demands Oh
our railroad companies and other large cor
porations for the purpose Of the improve
ment, extension and general ~enlargement
Of their business. There 10 no question bus
that In due season all real necessities OF TINS
sort will BIO met, but pending enlightenment
concerning this fact the financial powers
are naturally inclined to hesitate about be-
ginning serious car paigns for the q
In the stock market. Our bank reserves
are low, and 1t is known that in a few months
will come a peremptory call upon the fnan-
cial centres for probably $l5o,0oo,00o in
cash with which to move the crops. More
or less stringenoy in the money market Is
always caused each year by the autumnal
movement Of money to the Western farms;
but this year more thought than ever seems
to be taken by our bank managers regarding
the effect upon all financial concerns thai
the event will have. There are those high
In financial circles who maintain that n OF
tho best things that could possibly happen
to us In the next four months would be some
moderate contraction in business, and tney
aver that both the money situation and the
labor situation is being strained by q too
rapid business development. They assert
that the benefit that Wall Street would de-
rive from the increase Of money in the local
banks that would follow a slight slackening
In business would far outweigh any dlsad-
vantages that might occur from the letting
up OF business itself. Whatever the justice
of this view may be few people will be dis
posed to ~criticise 1t in 30 far as Il has refer
ence to the great speculation in real estate
the country over. Finally, there are those
who assign as a potent cause for the recent
apathy and depression in the stock markee
the fact that under the new laws life tnsur.
ance companies are barred from all particle
nation in financial syndicate undertakings.
Heretofore these corporations have formed
the backbone OF all Wall Street u~nderwrit-
ings where the large railroad borrowings
were concerned. Now hat obstacles In the
wav OF the formation Of such ~syndicates
have arisen; the railroad companies
others DESTROYS OF borrowing large guam
titles of money have had It borne In upon
them that it is moro difficult to get money
than before. .
Nevertheless, in spite Of all tremors and
drawbacks; the fundamentally strong fea-
lures of the current business n nanoi
situation stand out prominently IN the view
of every observer who looks at matters
sanely and thoughtfully. Mention q
been made Of the crop outlook and OF the
fact that an improvement In crop condi-
tions has taken place in the Last month.
Tomorrow the Governments monthly
crop report will be published and there Is
every reasonable expectation that 1t will
suggest that at least the second largest
crop in the history Of the country will be
harvested this year. Is there anything In
this for pessimisma II we are actually
to have big crops this fall does any Wal
Street SPECTATOR believe at heart that
the stock market will continue permanently
depressedp The state Of general business
ia best shown in current stories, which 1t ID
believed are we'll founded, that the net
earnings Of the United States Steel Corpora
ton for the June quarter viii run between
SIS, 900, 900 and sss. 900, 1000. There arc
numerous indications. too, OF an align
ment Of forces making for q betterment
OF the money situation. There are sound
reasons for thinking that only a very small
portion OF the remittances OF the foreign
insurance companies to cover their San
Francisco losses have yet been made to
this side. The Government has just issued
a call for bids upon the new Sc, 900 ,oOo
Panama Canal loan, and the immediate
effect OF this must be an enlargement Of the
bank note circulation In the country by
almost the amount Of the loan, as the
banks, who will be practically the sole sub.
scribers to the loan, will use the now bonds
for thu purpose Of increasing their note
issues. Moreover, inasmuch as the Govern.
ment's surplus stores Of cash are already
abundant, the money paid In on the loar
will unquestionably be redeposited in the
national banks and not be withdrawn from
circulation. But this Is not all. Within
the next twelve months refunding opera.
tons on the part Of the Government Of the
still outstanding Government bonds draw.
ing a high rate of interest will 1t Is believed
amount To not less than 500 900 900. Here