Los Angeles herald., 1907-12-07
BETTER FEELING
rs NOW OBSERVED
HEALTHY TENDENCIES WORKING
FOR RECOVERY
Though an Irregular Market viii Be
Seen for Some Time to Come,
Money Will Be Much
Easier

There is a distinctly better feeling in
tho financial situation due almost entirely
10 the Improvement in the money mar
ket which has been working out its own
cure. Hoarded currency is being returned;
foreign sold is pouring into our coiers' paiiA
reserves are beginning to rise; the credit situa-
tion is less strained; call and time money
rates are lower and redemption OF clearing
house certificates is already in sight. Inese
SYMPTOMS OF relief have fortunately shown
themselves even before the additional currency
furnished by the government had become
available They show natural ana nealthy
tendencies toward recovery. AS a result we
have had fair rise in the stock market ana
confidence has been correspondingly improved
In is quite evident that the corner has now
been turned and that liquidation in the main
is complete, says Henry Clews under date Oh
November 50.
later on but these promise TO be OF minor I'M
portance. After the enormous shrinkage and
liquidation of the past few months the market
is evidently on safer and sounder basis tnan
il has been for long period, and as soon 3s
the monetary situation rights itself ana con
fidence is more fully restored, values should
go back to more normal level
1t is not pretended that the market Will
promptly or wholly recover from the terrific
shock which 1t received last October. For
some time to come irregular markets must
be expected with more or less depression and
inertia. 1t must also be remembered that
there is comparatively little money available
for investment The country's liquid capital
has been practically exhausted, SO that time
will be required for the accumulation OF
fresh supply; and in view OF the reactionary
tendencies which have developed in business.
IL is quite probable that longer period than
usual will be required for saving purposes
Attempts Explanation
Another factor which must not be over
locked is that in spite of the large volume OF
business profits are showing material SHRINK
age owing to the Immensely augmented cost
of doing business This is strikingly Illustrated
i'm the current returns of railroad earnings. In
September the roads reporting showed a gain
OF over $ls, 900 in gross earnings, while net
earnings showed loss of S3'6OOOOO During the
n,ne months ending September there was an
increase of Sl56, 600 in gross earnings ac-
companied by an increase of only Sl5,09o,00O in
net earnings
Now that the panic is over and sober view
Is taken OF current events. the question is
constantly asked; What caused tho crash?
The answer is necessarily a difficult one,
because the causes were many and complex.
The main reason, however, has been that OF
general OVERRIDING. Credit was overextended;
speculation was excessive aud ill-advsed; ex-
panslon of every sort was being carried to ex-
cess by overconndence, until finally the coun-
try's floating capital was practically exhausted
through being turned too rapidly from liquid
into ixod forms,
Before very long VIC Will unquestionably see
much easter conditions prevail in the money
market About $10o, 100000 of gold has been
engaged or imported; there has been n large
expansion in bank currency and the recent
measures Of relief initiated by the government
will insure a redundant currency or more or
less subsequent nlation which is TO be re-
saried as unfortunate. Bank reserves should
now begin to rise, and by next spring If not
sooner we must be prepared to see gold ex-
ports on liberal scale, the low rates of in
terest, stimulated by an excessive and rigid
currency supply. being an important stimulus
to such an effux.