The sun. [volume] (New York [N.Y.]) 1833-1916, 1907-07-01
THE FINANCIAL SITUATION.


trude themselves. These may be summed
up in brief in the general statement that
there was a wide accumulation Of evidences
that the stock market was one in which,
temporarily at least. speculative liquida-
ton was over For several weeks past
the market. though at times heavy and
almost continuously duh, resisted alike
the efforts Of SPECTATORS TO @break' IL
and the influence Of unfavorable news
hat under ordinary conditions would
have brought about a severe decline. II is
true hat spectators for the fall rave been
more cautious recently and hat in the
dulncss that prevailed throughout the
greater part Of the month the absorbing
power Of the market has not been sub
jected TO the test OF any very severe selling
pressure. Still il was clear. taking all
things together. that the market was in a
condition Of equilibrium. II buyers were
few sellers were scarce, also; and buyers
were present in sufficient quantity to take
care OF all the stocks that were sold. The
plain inference from this was that IL any
further notable fall in prices was to be
brought about II could only be accom-
plished by a liquidation Of securities held
for investment; and the only cause that
couN in turn effect this operation vas
the presence Of a far greater fear than
any that had been previously experienced
regarding the continuance Of dividend
distributions and the general future Of
the country's business. A retreat Of the
short interest in tho market was therefore
inevitable and there is little doubt that
the rise in prices last week largely con-
sisted OF a movement OF this sort. There
was admittedly some resumption of
speculative buying for the advance. The
Stock Exchange room trading element
found that il was easier to get prices up than
down. and so they began purchasing stocks
with the idea, OF course. Of ceasing their
buying when they discovered that stocks
we're once more plentifully offered for sale.
4 matter that played a very considerable
part in the improvement in sentiment
was nc doubt the clearing away of diff
culties that at the end Of the weeii before
last appeared TO be- not a little threatening
in the French political situation. The
riots in the wine growing districts in France,
while serious, would hardly in and of them
selves have risen to the dignity OF an inter-
national financial influence. But there has
always been a lurking fear in financial
circles. and particularly among bankers
whose business life harks back more thar a
score OF years., as to the permanency Of
the present French form of government
The French Republic has been ever beset
and continues to be beset by many infu-
ences that seek to destroy IL; and when,
therefore, the disturbances at Narbonne
and Beziers were accompanied by mutiny
in a French regiment Of the line a shudder
was felt on every European bourse. 1t
seems, however. as il the crisis Of all these
matters has passed. During the week
the French and English periodical financial
settlements were successfully concluded,
and as the indrawing Of money by our own
bankers in preparation for the July I dis
hursements caused a natural rise in money
rates locally there WINS a consequent cessa-
ton Of gold exportsfrom this SIDE. IL seems
to be regarded "a quite unsettled whether
or not these metal remittancss are over.
with the probabilities apparently favor
ing the conclusion hat they nave not yet
finally stopped. The Bank OF France ia
undoubtedly anxious for many reasons
to build up its gold reserve to a point il
not as high as that touched last year at least
TO a full normal average. and while the bank
has ceased to bid for gold as excitedly as
it did a few days ngo il is still Offer
ing Inducements for an inflow OF the
yellow metal to its Golfers. Again, a
development OF vast importance from a
financial point Of view has been the
improvement that has most certainly
taken place in the condition Of the crops.
The crop weather during June was first
rate and during a large portion OF the time
OF a hot forcing character that met the
ideal needs OF the situation. Crop killing
experts have Of course been at work with
their low estimates, but there il little cues
ton in the popular mind as to what is the
true state OF affairs. We shall nave a re-
duoed winter wheat harvest which will
probably not he made up by any notable
increase In the spring wheat production,
81 that the general wheat crop OF the year
ia likely 20 he 100. 900, 900 bushels less than
il was a year z But save for the fact
that the planting season was a little back
ward the outlook for spring wheat and
corn is at the moment more than fair.
while the greatest improvement that has
taken place in any crop section in the month
has been in the cotton belt. Considering
the rise In the price of staple commodities
that has taken place il is believed now
III nlRu ntdnCIhi uudTueTb tndL tine farmers
of h country will receive as much for
their crops this year as they have ever
done before. The immediate railway tom
mage from the harvest may be a little less
than it was in 1908, but the money value
Of the harvest will not be impaired and
this, after all. is the great thing that the
financial markets have TO consider.
As tim goes on there Is coming to be a
more general n a clearer perception OF
the exact conditions now confronting the
country's business and financial life. Dur
ing recent years a relatively e%xtravagant
rate Of personal expenditure. a diversion
of money into local business enterprises
and a great investment Of funds In the
issued by the country's large in
dustrial and railway corporations for the
purpose Of improving, rebuilding and ex-
tending the lines and plants Of these COM
panies at a high cost of labor and Of every
item of expense has used up so much money
that only a comparatively small surplus
remains for the purpose Of meeting further
cornorate mazda The natura Of tho fNroa