The Washington herald., 1907-07-01

only be accomplished by liquidation OF
/ Securities held for investment.
Shorts Forced TO Retreat.
A retreat Of the short interest IN the
/ market was, therefore. inevitable, and
there Is little doubt that the rise IN
prices last week largely consisted Of a
movement OF this sort. There was admit
tedly some resumption Of speculative buy
/ ing for the advance. The stock exchange
room trading element found that II was
easier to get prices Up than down, and
so they began purchasing stocks, with
the idea, OF course. Of ceasing their buy
/ ing when they discovered that stocks were
once more plenufully offered for sale. A
matter that playeI a very considerable
part In the improv ement in sentiment was
no doubt the clearing away Of difficulties
that at the end OF the week before last ap-
peared 10 be not little threatening in the
French political situation.
It seems as If the crisis OF all these
matters has passed.
During the week the French and Eng
fish periodical financial settlements We're
I successfully concluded. and as the in
drawing Of money by our own bankers
in preparation for the July l disburse-
ments caused a natural rise IN money
rates locally, there was q consequent ces-
satiou Of gold exports from this side. II
I seems 10 he regarded as quite unsettled
whether or not these metal remittances
/ are over, with the probabilities apparently
favoring the conclusion that they have
not yet finally stopped.
Crop Outlook L. Good.
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 large portion OF the
time Of a hot forcing character that met
the ideal needs Of the situation
We shall have reduced winter wheat
harvest which will probably not be made
Up by any notable increase in the spring
wheat production. Sc that the general
wheat crop Of the year is likely TO be
100 10000 bushels less than il was a year
ago But save for the fact that the
planting season was a little backward. 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 II Is believed now
In high financial quarters that the farmers
OF the country will receive as much for
their crops this year as they have ever
done before. The immediate railway ton
mage from the harvest may be a little less
than It was in 1906. 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.
There is coming to be more general
and a clearer perception Of the exact con-
ditlons now confronting the countrys
business and financial life. During recent
years a relatively extravaganza rate Of
personal expenditure, a diversion OF
money into local business enterprises and
great investment Of funds in the Sc
Curities 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 ev-
cry item OF expense, has used up so much
money that only comparatively small
surplus remains for the purpose of meet
ing further corporate needs The nature
of the force that has been active the land
over is best illustrated In the small in
crease in the deposits in the country's
savings banks. The savings Of the people
Of the country as deposited in these insti-
tutions have been in the last two years
nothing approximating as large a sum as
should have been expected, in view Of
the country's prosperity.
Money Stringency General.
The expenditures Of the country for all
purposes have. in other words. outgrown
the country's supply of capital, and this
state Of affairs is accumulated and COM
plicated by the circumstance that the
condition in our own country is paralleled
In all the other great countries Of the
world; so that it is not easy for us to
draw money for our relief from foreign
sources.
A consensus among practical and
thoughtful men in every branch Of bust
ness or finance is that there must be some
sort Of a contraction of business, and that
this contraction will be enforced, whether
it is agreeable or not.
A matter that has been widely COM
mented upon during the last fortnight has
been the absence of the usual demand
FOR bonds and other securities by in
vestoTs in anticipation Of the disburse-
ment Of interest and dividend money on
July l. Nevertheless, it must be said
THAI there is more ground for financial
hope and encouragement at the present
time than there has been ever before at
corresponding period in the country's
history.
There are multitudinOus Indications that
whatever contraction in business is COM
ing will not be severe. and that prices Of
stocks In Wall street have already dis
counted it, if they have not overdiscount-
ed the event.
As has been maintained over and over
again in this column. in recent years q
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 foodstuffs. which has raised the