The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-04-23
THE FINANCIAL SITUATION.

All sou nd indications In the forepart OF
last week pointed to the probability OF a
rising market for stocks. The money strin-
geHcy had passed. Time money on Tues
day loaned at y! per cent. for sixty n
ninety days and at 8 per cent. for a period
lasting into next January or "over the end
of the year. Call money had dropped to
almost nominal figures and was fairly urged
upon borrowers by the great money lend
ing institutions. This was primarily due,
Of course, to the engagements within a short
space of time Of nearly 81, 600, 600 in gold
for import by our bankers and to the action
Of the Secretary OF the Treasury In ad-
vancing public money to the banks taxing
gold for import in sums equivalent to the
amounts Of gold actually bought abroad.
This represented, in substance, an ahow.
ance to the banks Of the interest on gold
In transit to this country, and although IL
deranged the foreign exchange marFet
and soon resulted, necessarily, In such an
advance in exchange as made gold imports
impossible, it yet temporarily facilitated
metal remittances to this side. The weather
over the country was ideally fitted for the
growth Of the winter wheat crop, for the
seeding Of spring wheat and for the de-
velopment in every way Of the normal
spring trade. There were emphatic signs
OF renewed buoyance in the iron and steel
business and it became absolutely evident
that the so-called reaction in this line, OF
which 30 much talk had been heard, was
no more than a brief resting spell after a
period Of %unwonted activity and that orders
for steel rails, structural iron and other arti-
Giles Of iron and steel production were being
placed in quantities more prodigious Than
ever. The demand for copper, too, continued
on such an unprecedented scale as to force
prices Of the commodity to a higher level
and to make it positive that the copper
mining business this year would bring
larger profits to those conducting it than
they had ever before realized in a similar
period. The coal strike, owing to the prac-
teal resumption of labor throughout the
entire soft coal section and to the distri-
button among consumers OF the large 40
cumulated supplies Of anthraOte, had be-
come an almost negligible factor IN the
situation. SO far as the stock market ltsen
was concerned, 1t was plainly enjoying the
benefits Of a generally strengthened posi-
ton arising from the reaction in prices that
had occurred and from abundant proof
Of the fact that stocks we're still concen-
trated in strong hands.
Everything was thus shaped in a very
favorable way, financially, when the news
came on Wednesday morning of the great
calamity in San Francisco. 1t was hough
at first that the damage done, though I'M
ouestionably great, would not be surpass-
ing. and that it would be limited to a certain
section Of the ill fated city; but as the hours
Of "Wednesday and Thursday rolled by
II was perceived that what had happened
was a colossal disaster, and that in 1t there
had been a larger destruction of property
than ever before in any n Instance In
the country's history. The stock market
reeled under the blow, and the matter Is
still and must be for come time to come
the overshadowing feature of importance
In the entire financial situation. The first
sensation naturally felt by a security mar
ket under such circumstances is that OF
mere shock, IN which humanitarian feeling
of sympathy over the financial losses and
physical suffering arising out OF the affair
are Joined with the vivid illustration pre-
sented of the sudden and unexpected ways
in which accumulated wealth may be wiped
out. Such feelings inevitably make Tor
conservatism on the part OF every In
yestor and speculator, although they are
lust as Inevitably of evanescent character
THEW are soon succeeded by a desire to
gauge with as great deilniteness as possible
the exact direct and indirect fnanclal
effect of the misfortune. But in the present
"a 20 these efforts were and continue to be
attended with peculiar difficulties. 1t is
obvious. to begin with. that the ~precedents
of former wears In such matters, notably
those of the Baltimore fire and the Calves
ton tidal wave are not now especially worth
recalling. On neither one of those occasions,
or even in the case Of the Chicago fire, was
the work OF rebuilding the city so great
and costly as it must be in the present in
stance-that is to say, was there such a
necessity as will now he felt for the ship
ment of money from financial centres to
the scene OF trouble. For a long time to
come demands for funds from this source
will affect the money market here. Our
bankers will not, of course, he called upon
to furnish all this money. A large pro-
norton of the loss involved falls upon the
foreign insurance companies, ana these
companies mus make heavy remittances
to their correspondents hciei put' oi 'iS
other hand, the selling of securities which
this will bring about in the foreign markets
must be reflected in financial conditions IN
our W country, while our own fire insur-
ance companies must also make liquidation
of some share Of the stocks and bone
in their treasures. There follows the
question as to the length Of time that must
elapse before the damage done can be re-
paired and whether on account OF the pecu
liar nature Of the disaster San Francisco
can hope to occupy, as before, its COM
handing commercial and industrial position
upon the Pacific coast. People, or at least
Anglo-Saxon people, do not like to live in
CITY that is in constant danger firm earth
ouakes. Insurance companies wall, doubt
less. in future limit their hazards in SAT-
Francisco: nor does it seem probable tina
business men or people of wealth will, unit
some years have elapsed, authorize thu
construction Of buildings there on an!
such scale Of magnifcerce as was pre-
viously seen. The great problem here l.
for some form Of building construction
IT. l.. ,n Tor no ic hum nlyy nnGei