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

finance IL that there must be in the first
place Some sort Of a contraction Of bust
ness and that this contraction will he
enforced whether IL Ia agreeable or not,
and that in the second place there must be
a stoppage Of that governmental inter-
ference with the delicate minutiR OF bust
ness that has been the ~favorite play" Of
~demagogio politicians in the last two or
three years in England and France no less
than IN our wi land. A capitalist whose
homely expressions and great sagacity
have made him one Of the most noted and
powerful figures on the country's financial
stage to-day compared existing condi-
tons in the course Of private converse
ton recently with that of a calf tied up in
the farmyard that after gambolling and
rollicking for a time finds that it has wound
the rope around the stake to which, IL is tied
and cannot move save when the rope is
again unwound. We have" aid his
capitalist. got our nose against the stake
A matter that has been widely commented
upon during the last fortnight has been the
absence OF the usual demand for bonds and
other securities by investors in anticipation
Of the disbursement OF interest and divi-
dend money on July 1. A clue TO the reasons
" bItb BldtK utiIlbbu " dhOtutN w ~
experience OF on law firm in the city which
has in Its care over $40. 900 600 of trust estates
and is usually a large buyer of securities
at this season Of the year. The firm Is at
the moment investing hardly any money
owing chiefly to the fact that 1t has
in a sense m~ortgaged ahead the interest
and dividend money that IL will receive
on the first Of next month for the purpose
OF providing sums to pay instalments to
former subscriptions to new stock and
bond issues that its clients were practically
compelled TO make. The situation with
them is the same as with the thirty large
stockholders Of the Great Northern Railway
Company upon whose shoulders has fallen
recently the burden Of raising among
themselves $780, 900. 900 as their share
of the money for new stock issues.
The rich men OF the country are at
the moment. comparatively speaking. not
in funds. Nevertheless il must be said
and this is the pleasant diverse side of the
picture-that there is more ground for
financial hope and encouragement at the
present time than there has been ever before
at a corresponding period in the country's
history. A definite reaction is in progres
against -the campaign against the railways"
There are multitudinous indications that
whatever contraction in business is coming
will not be severe and that prices Of stocks
in Wall Street nave already discounted,
IL they have not overdiscounted, the
event. Even IL as the result of reduced
business profits certain railway and in
dustrial dividends are lowered the present
price level of the stocks of the companies
concerned is such that, considering the fall
in the prevailing interest rate for money
and the reduction OF wages and the general
operating expensesthat will also beenforced.
current quotations for the stock are not
TO be adjudged unduly high. As has been
maintained over and over again in this
column, in recent years a fundamental
change for the better has taken place in
our business affairs, in the increase in the
number of people in the country and in
the larger demand for the country's foe
stuifs which has raised the agricultural
population OF the West from a condition Of
permanent poverty to a condition of per-
manent afiuence. The most hardened
pessimist in Wall Street cannot foresee
any such period OF hard times as was known
in the depressions Of previous years. At
the moment, with the frightened political
outlook abroad and the improvement in
the crop situation, the one adverse factor
from a financial point OF view appears
to be the strained bank position. The
cash reserves in our banking institutions
are manifestly not such as to invite spec
ulative buying Of stocks, and while no
doubt a great invisible store OF bank credit
exists in the lending that may take place
by trust companies and institutions whose
accounts do not appear upon national bank
Clearing House sheets the banks OF the
country asst whole seem to be confronted
with a financial crop moving" problem
fully as puzzling as that which was pre-
scented a year ago So far as the state Of
the strictly investment market is con-
cerned the result of the city Of New York's
bond sale last week speaks for itself.