Aberdeen herald. [volume] (Aberdeen, Chehalis County, W.T.) 1886-1917, 1907-11-07
BUSINESS SITUATION
view OF EASTERN LUMBER JOUR.
nal ON SUBJECT.
impossible to Turn Present FURRY
Into Panic. Assigns Excessive
Prosperity of Recent Years as
Cause. The Only Danger Is That
People Nay Become HysteriCal.

1t is very doubtful if even the
most pessimistic thought and action
could turn the present business sit
uation into real panic such as the
country has experienced in certain
years which have passed. The ele-
| ments that make for real business de.
preston do not appear as a pert OF
the situation today. Yet there is
every reason why people should keep
their heads in order that the minor
evils which do exist shall not be mag.
nified, and conditions become worse
than there is any necessity for. As
matter of fact the actual earning
capacity of few, If any, legitimate
lines of business has been materially
impaired by the fluctuations in the
stock market values of securities rep.
resenting those lines of business. =
What has started the present diff.
Guilty has not been a matter of a day
or a month, or year, even. 1t has
been impending for some time. II
has existed in the fact that the coun.
try has been going at too rapid a
rate. Excessive prosperity-prosper
ity that exists today as much as il
existed a month ago-has caused a
good many people to spread out
rather thinly oyer a good deal OF
ground. In other words, the advance
in apparent values--values represent
ed by market quotations-has been
such as to attract the cupidity of in
vestors and spectators. They have
bought on narrow margins or have
bought stock outright and have paid
only a part of the purchase price.
They have then put this up for COL
lateral to secure funds to make fur
ther purchases of a like character.
Then comes the furry in stocks ac-
companied by: tightening of the
money market. These loans are call
ed in, and in order to raise the
money, the borrowers are obliged to
sell their stocks. The large result
ing offerings caused depression in
market values, but not a shrinkage in
dividend paying ability. To protect
themselves, their depositors and the
business of their representative COM
munities, the banks of the large
business centers have taken steps to
hold their currency at home, and not
permit it to go for service in the
general liquidation which is going
on. This need alarm no one, for it
is not believed that the absolute
needs of the patrons of the banks will
be denied.
AS was said at the beginning of
this article, the situation does not
contain the elements that have con-
tributed to financial disasters of the
past. There has been no general
crop foliu.'e at all, as a matter of
fact. The yield of most farm prod
ucts has been less this year than dur
ing the past few years of bumper
crops, but the higher prices have
more than made up the difference. A
very considerable part of last years
crop was in the hands of the farm
ers when the present era of high
prices was entered upon, and has
come to market at the higher values.
Europe has been buying heavily of
our products in all lines and owes
us a large balance, part of which is
coming forward at this time. Deposits
in Western and Northwestern banks
were never larger than they are at
present. Labor was never more gen
orally employed nor better paid. The
only idle man is he who is idle from
choice. Railways all over the coun-
try are swamped with business which
they can not handle rapidly enough,
and although business in some lines
is less active than in others, the to-
tai volume of business of the coun-
try was never greater than it is to-
day.
The only possible danger-and
even that is remote-lies in the
chance that people will become hys-
terical. The man who goes to his
bank and demands cash, when his
only reason for doing so is because
the banks are endeavoring to induce
people to handle their business with
out the use of an unnecessary amount
of actual currency, will contribute to
a possible situation by which he will
suffer as much as any one. The clear
and cool headed business man will