The Cairo bulletin. (Cairo, Ill.) 1???-1928, 1906-01-08
ARE TWO DANGERS
Over-Extension Of Credit and Foster
ing Undue Speculation, Says
Henry cews,

| oDecldl 10 Inc BHDelln.
New York. January 1.-THE year
1906 opens under most favorable aus
/ pieces. General business conditions are
satisfactory and ought to continue so,
at least until the next harvest. SO far
as the stock market Is concerned there
are but two dangers, and these arc
rather serious ones; an over extern
sion of credit and the fostering OF I'M
due speculation. The money squeeze
i is now over, and from now until the
middle of March money should re-
main in a comfortably easy condition;
bur the recent stringency in the money
market Is proof Of the need of an
elastic currency system and the rather
lunwelcome demonstration of the per
sistency of speculative demands upon
our banking resources. Unfortunately,
the latter are Very frequently under
the domination of men whose inter
ests lie in the direction of still higher
prices on which to unload their sur
plus stock. In fact, this power of
peculatiye interests over the financial
institutions is one of the worst dan
gers in the situation.
While the public has lately ventured
into the market more boldly. il has,
nevertheless, thus far only partially
relieved rich holders of their surplus
stocks Conditions being highly favor
able, the original owners OF unseason-
ed securities, especially the industrials,
sem determined 10 force a speculative
craze in order to unload a portion of
their burden upon the public. Whether
they will be successful or not future
events must determine 1t is TO be
hoped that the public will not jump
too eagerly at the bait thus offered,
and it Is also highly desirable that
bankers should more generally insist
upon a conyersative policy and dis
crimlnate sharply in the making Of
loans. Further than keeping these
cautlonary ideas steadily in- view it
seems almost useless to resist the spec
ulatiTe craze Prices of the best Sc
curities are so high as to be beyond
ordinary investment requirements. and
this year there is a smaller proportion
OF money coming into Wall street for
investment than in previous years;
hence large sums are going into real |
estate and variety of other new enter |
plises. This Of itaelf is "A suggestive |
incident. All indications point to a |
fresh burst of speculative activity. |
{En nun do Nh mara than fn1nrocc nm
on our friends the great necessity for
caution and sharp discrimination, par
licularly against the low grade indus
trials and cOppers, many of which are
inflated. One reason for
a wider degree OF activity
Is that prosperity IS SO marked
the West and South The /
agricultural classes are not only out
Of debt, but have money in the bank,
md the same is true of the laboring
classes, both of which are easy vic.
inns 10 the many get-rich-quiek
schemes which are sure to be floated
at such times as the present History
viii simply be repeating itself: for all
prolonged eras Of prosperity have been
capped by speculative debaueh, and
his one is not likely to be an excep-
ion. The year 1905 was a record
breaker in almost every respect and it
now looks as if the year 1906 may be a
record breaker in regard to speculation
however much that may be regrett-
ed. 1t win doubtless be pushed 10 the
breaking point, which usually comes
when least expected.
The foreign situation continues TO
improve. The Russian government APP
Darently has the rebellion under con
rol, and if the car could but rise TO
he occasion and grant his people the
reasonable demands which they have
made. the Russian empire might be
established on The basis of peace
and the world enjoy a new period of
)rcgresa. Some little disirust is shoWn
,yer the strained relations between
France and Germany which have exist
I'd for some time past. but thus far
here has been nothing seriously |
threatening in this respect Money