Evening star., 1907-11-17
Financial News Letter
BY. W. G. NICHOLAS.
NEW YORK. November 10. Il

BY. W. q. NICHOLAS.
NEW YORK. November 16 1907.
The grab for currency is binding the
| eyes Of most people with the fact that
| the general situation is improving. This
banks not only Of New York. but
| those Of every other important commu-
nitv. are rigidly adhering to the credit
| policy adopted early in the panic. This
| thev decided was the only way to save
| themselves and the country from whole
sale bankruptcy. The experience through
| which business men are passing has been
! and is still trying. and full Of keen en-
| barrassment all along the line. but re-
suits arc showing the wisdom OF the
methods employed to safeguard the stu
alton.
| There Is more money In the United
| States at the present moment than ever
| before in its history. The circulation
| at the beginning of the ordeal three
| weeks ago was approximately $Sa per
| capita. It has since increased. and by
| the end Of the year should be at least $Ss
| or $40 per capita During the months OF
| November and December there will have
been injected into the circulation nearly
| ton including about SIS 100000 govern
| ment deposits, $73. 900 900 gold imports.
$50 00O. .eO0 to $4,000 Coz new bank note
| circulation and $1O,00o.O05 to $12 O0O.0N
Of new gold from the mines. In ad,
! dition thereto may properly b, added
| lOO.OOO,U0 in clearing house certificates.
which serve the purposes of money be-
| tween the banks Of the cities where they
| are issued The tieup in actual cash Is
| the unpleasant feature Of the stu alton
which is most directly felt in every COM
munity and which has put tempol ary
| restriction on the marketing Of products
! Of the soil. of the mills and the factories
| The development is one which commands
| the attention OF every thinking person
| and enforces the truth that no harsh
| trouble can inf1ict a great center like
New York without being felt in every part
| of the nation. This fact was scoffingly
| denied up to within comparatively re-
| cent period by a great many people who
ought to have known better, and whose
| judgment and preachings have been
grossly misleading.
There is one thing which can b
| bought with certified checks and drafts
| stocks. Tens Of thousands Of men and
| women are converting their bank balances
| into securities, thereby Kidding them
| selves of a'arm and doubt and helping out
| the situation. They are at the same time
gains of a generation. The extent to
which standard issues of railroad and
| Industrial shares are being thus absorbed
| Is largely conjectural but the aggregate
whose books show 100, ,OGO shares of stock
| bought and taken out of the market
| OF course, there are not many firms Of
| that size which could make good a
showing. but the houses ara numerous
| that have distributed 1900 to 25.0OO
| shares each. The aggregate of stock that
| has been placed among investors dur
| ing the last two or three months must
| foot up at least 100000 shares. This
total. great as 1t is, represents only a
~ ho yuyhn ntynt
| issued. but It nevertheless takes out OF
| the market enough to save values from
collapse. The absorption Will have to
20 on for considerable period before
| the pressure is off and the floating sup
! ply reduced to manageable limits. Every
| day helps, however, and lessons the bur-
| den on banks and trust companies
Every day liberates more capital tied up
| IN loans on securities. -..
| The outside country is feeling sore at
present toward New York because it
cannot draw down all its balances here
| at once. The same complaint holds as
against every other city, however. al
| though in lesser degree The kick d.
rected most energetically against New
York at the moment Is because the asso-
ciated banks and trust companies, while
| refusing to ship money into the interior.
were able to dig up $750oO,O0o- to $1Oo,
100000 to tide over crippled trust COM
panies at home. The outsiders who canr OF
get their balances in cash seem to think
the New York troubles have been and are
being financed at their expense-wth
forced loans. may be said. They are fill
ing the air with threats that never again
will they put their balances In reserve
centers II these balances are not avail
able in times Of need. All of which would
seem to prove the contention that bank
deposits in other banks are more likely
| to be sources of weakness than Of
strength. This i'll will must necessarily
| fade away. as the maintenance of bal
ances in large cities is vitally essential
to the smooth running of the machinery
OF business and the expeditions handling
Of products.
An encouraging feature Is found in the
fact that mercantile houses everywhere
Will be sustained until after the holiday
season Everybody of consequence recog-
nizes that If left alone the merchants will
realize very large sums from their holiday
| sales. and that with the time thus given
them will be able TO mass their resources
and out themselves in better shape than
they were when the storm broke. After
the first Of the year there Is likely to be
general mercantile liquidation. Accord
ling to Information received by commercial
agencies and other reservoirs of CONNER
cial data the merchants throughout the
interior and the west have been specula-
ting in their way as heavily as the gam
blers in Wall street. They have loaded
their shelves with goods Of every descrip-
tion. which must be sold for what they
Will bring. In order to meet bills. Fortu-
nately this expected liquidation of mer-
chandise will be in section Of the coun-
try that Is superlatively rich. It is the
expectation that the great farming classes
which have raised $4,000. 600 900 to S.
GOO. 100000 of products every year for the
past decade will find the bargains ire
sistible. They have the accumulation of
ten fat years and represent the real mass
Of buying power in the United States. On
the show down they are relied upon to
save the country" and In so doing fill
themselves Up with the good things OF
earth at auction sale prices. The money
which they are expected to pour into the
pockets of merchants will be the lubricant
to set in easy motion once more the ma
chinerv of business. 1t sounds very
beautiful and IL the theory works out
there should be witnessed by the end of
another ninety days a generous inflow of
cash at the great cities which will in
augurate a period of easy money and a
resumption of activities in many quarters
at resent.
Many very important people are in sub
stantial accord in believing that there are
40 to 60 points ahead in purchases of some
Of the standard stocks now o5tainabie on
q basis of 7 to 8 per cent. Combinations
are already forming for the quiet pur-
chase of favorite stocks in anticipation of
great rise in prices. In almost every
instance the expression is voiced that no
speculative expansion need be looked for
and no very great rise in quotations until
after the turn of the year. Bankers are