The Mitchell capital. (Mitchell, Dakota [S.D.]) 1879-1918, 1907-09-20
NOW
HAVE INNING
Making More Money Than at
Any Time in Twenty
Years.
From the New York Evening Post,

The existing situation in the finan-
cial markets offers to capitalists and
investors generally the opportunity of
which they have been deprived for
nearly twenty years of obtaining a
suitable return on their invested capt.
tai" This is the verdict with which
the eminent French economist, M. Paul
Leroy-Beaulieu. sums up in a recent
article the problem Of the decline in
prices OF investment securities. He as
cribes this situation in general to the
Well known sequence Of periods Of In
dustrial imitation and industrial de-
preston. This has been a period Of
!nnatlon, but. like all such periods. 1T
Is limited by the principle tina bank
Liabilities and loans n expand in
definitely, bank reserves cannot fall off
continually. nor can business perpet-
ually support high money rates" The
inevitable sequel OF such conditions is,
first a shrinkage in speculative securo
tiles. next a fall in prices OF raw ma
terials OF manufacture. notably metals.
Why is this So? Simply because
real capital, in the end, presents an
insufficient supply for people or ma
lions whose spirit of enterprise is so
lar stimulated as to lose sight Of all
Notwithstanding which has al
ready happened In the most prosperous
end most audacious of the Industrial
states. Germany n America" M. Lee
~toy-Beaulieu calculates that, for all in
iustrial and financial purposes, the
United States has undertaken to ex-
pand In a single yea 1000 million dol
sars to $500 million dollars and he thus
pursues the analysis:
Nations Hearing Wealth.
Probably the annually accruine can
ttal Of the United States does not reach
one-third OF this sum. 1t was there
fore necessary to find the remainder
on foreign markets. But the outside
world itself Is far from having any
such sum OF ready capital to dispose of.
Not only so, but almost all the ma
ions are finding need at home for the
full amount OF their annual savings.
Germany absorbs all it's own capital
and runs short at that; the same Is
true OF Austria, Russia. Italy and
Spain. So also of the Scandinavian
states. Only four countries, the old
est reservoirs OF capital in the mod
ern world. are today in a position to
export it-England. France. Belgium
and Holland. And even Of these Eng
lands capacity for providing surplus
capital has been greatly reduced since
the South African war. and what still
can pc spared goes largely to thn Brit
fish colonies.
In short. the growing Industrial
states. particularly the new countries.
are at this moment demanding more
capital than the whole world has ac-
cumulated recently. or Is accommodating
today. From his fact follow twt. con.
sequences-first. that the users O. this
capital have to pay more for it. IN the
shape of a higher interest rate; second.
that they will be compelled to postpone.
or extend, for several years, many en-
terprtses On which they had decided
and for which they had already made
preparations.
Under these conditions, Their. ha,
been inevitable some check to the mar
Vicious expansion of industry which has
been going in the two years past. Mar
kets, Industrial and financial. must in a
measure reduce their scale OF prices
and. In some proportion the price Of
raw material must come down. This
is. at all events, the conclusion point
ed out by h reflection. comparison
and experience."