Gilpin observer., 1907-08-29
THIS IS CONSENSUS OF OPINION
AMONG THE BANKERS OF
THE WORLD.
INCREASE IN DEPOSITS
EXTRAORDINARY DEMAND FOR
FUNDS IN ALL LINES OF sUsI.
NESS, SAY LENDERS.

evidence gathered by the COmmerclal
National Bank of Chicago from 10000
correspondents over the country Its
summary of the Crop and Business
Report" is as follows:
I'VE endeavor in this summary to
present to the public an answer to the
question which all men are asking:
rs the business situation sound and
the outlook assuring?
This answer Is drawn from COM
posite picture Of conditions as graph
ically described in letters from thou
sands of banking. manufacturing
and merchandising correspondents
throughout the country. Not far from
10000 separate replies enter into the
picture before US and the definiteness
of the image Is remarkable. There is
no vagueness or blurring about 1t. 1t
is clear-cut and incisive.
THE overwhelming preponderance
of evidence is that the business stu
alton is sound and satisfactory. Not
one of the thousands Of replies mega
tives this conclusion in definite terms.
That there has been marked easing
down from the tension of the spring
orally admitted, but it is admitted
without a trace Of regret or misgiving.
The country had been rushing ahead
at a whirlwind pace until the tax on
credit ard capital accumulations COM
PEELED a respite. The demand for
goods to meet instant needs or to re-
place other goods destroyed by wars
and calamities or to provide for the
certain needs Of the future has been
unprecedented. To meet this 1t has
been necessary for the manufacturers
and distributIve agencies of the entire
world to employ almost every availa-
BILE unit of money and to put into ac-
ton every potentially Of credit. The
result is too familiar to all men o. at
fairs to need exposition. The strain
on the money centers of the world has
been very great. In ordinary times the
stringenCy of one country is Offset or
relieved by the plethora of another.
through the commonplaces Of the
mechanism of exchange. But 1t has
been different since the peace OF
Portsmouth. There is no easy money
in the civilized world today
THE composite picture drawn by
our correspondents tells a wonderful
story of relentless warfare on the wild
places of the continents; 1t shows a
marvellous picture of advancing stand
ards of living among the people of this
country. And precisely in the same
way the money conditions of Europe
tell similar stories Of warfare on the
wilderness Of Africa and Asia and SIM
liar stories of the pushing of trade and
of the advance of civilization among
the simple peoples Of the world.
The Speculative Market.
ITO suggest an idea OF the urgency
Of the demand for capital to expand
and equip the productive capacity Of
industry SO that it may be on par
with the fast-increasing consumptive
demand for the things Of modern life,
we call attention to the world-phenom
enon Of stagpation in the purely spec
ulative department OF affairs. Recently
we had seen record low price for the
British consolidated debt-'consols'-
indicating that the rewards of capital
in industry are so attractive as to
prompt withdrawal Of funds even from
the acknowledged chief Of investment
securities. The same phenomenon in
its application to the funded loans of
all governments except our own-and
for this there is a special and artificial
reason-and In its application to the
bonds and shares of the exchanges
is a further light or the tension which
is everywhere felt In money affairs.
1T is a curious and striking fact
that in all the thousands Of replies
which enter into the picture Of the
business situation before US there is
hardly a reference to the speculative
lethargy which contributes so large q
part Of the news from day to day.
And yet 1t is . truism familiar beyond
need of mention that the security mar.
kets exist merely a. governors Of the
supply OF mobile capital. OF necessity
their activity must decline when eco.
nomic forces drain from their stocks
OF stagnant capital. When the mobile
capital Of the world is needed In pro.
ductive enterprise or In distributive
service 1t must necessarily desert the
stock exchange, and security specula.
ton must inevitably wene before the
necessities and overtopping import
ance of Industrial activity.
Money Demand and Credit.
THE bankers of the country, with
few exceptions In the Far West, report
an extraordinary demand for funds in
all lines of business activity. Interest
rates are very firm everywhere and In
the central reserve and larger reserve
cities the inquiry for funds 10 much
exceeds the supply that money is de.
scribed as very tight The range OF
our Investigation 1ustines the conclu.
sion that bank deposits show a straight
average increase Of about 14.2 per cent
as against q similar average increase
Of 1913 per cent. In the loans. The
averages weighted according to the
relative magnitudes Of the totals would
probably show a closer correspondence
between the growth Of deposits and OF
loans. It Is significant that the states
Of primary production in agricultural
and mineral products show . larger
margin Of deposits over loans than the
atatea Of aecondarY nroducfion. that IN