Los Angeles herald., 1907-11-28
HYSTERLA is
ALL GONE
IMPROVED CONDITIONS ARE NOW
TO BE FOUND
COUNTRY ON ROAD TO RAPID
RECOVERY
The Present Offers Great Opportunity
for the Genuine Investor to
Gain Large Profits
Ultimately

has at last disappeared and is no"
giving way to q sober recognition OF
the fact that conditions have radically
changed, and that the sooner business
begins to readjust itself to these new
conditions the sooner will it be started
on the road to real recovery, says
Henry Clews under date of November
3d. OF course the abnormal stringency
in money is still the chief source OF
difficulty. Until this abates 1T Is idle
to look for any change for the better.
Credit is badly disorganized and unaple
to take it's part in the nations transac-
tlons Consequently there is an abnor-
NAL demand for currency just when
the prevailing distrust keeps alive the
tendency to hoard.
Not until the premium on currency
begins to disappear, not until clearing
certificates begin to be withdrawn, ana
not until bank reserves begin to raise
can any genuine Improvement be
looked for. 1t is quite evident, now
that the situation has passed beyond
the possibility of relief by artificial
measures, that It must he allowed TO
work out it's own solution. Events
must take their natural course. There
is already a large increase in currency
supply, and we possess an enormous
stock of gold, which promises to be
still further increased by importations
from abroad. AS soon as business re-
turns to the normal or settles down to
the lower level, we will surely be con-
fronted with an excessive imitation of
currency and all the unpleasant con-
sequences which that may involve.
Congress VIII Act
This, however, is contingency
somewhat remote and can be best dealt
with when it arrives, which may not
he until the end of winter or the ar
rival of spring. During the interim we
shall probably be fully occupied with
the inevitable process of readjustment
into which we have plunged with un-
expected force and suddenness. Incl
dentally we may receive some encour-
agcment by the efforts of congress to
give us sound and elastic currency
system: for that is sure to be burn
ing and possibly the leading question
in the coming session.
Fortunately there are few markets
that arc overstocked, and this prevents
any such wholesale slump in commodi
ties as occurred in securities. IL any
ovcrsupply develops it will come from
lessened consumption: and steps are
already being taken to curtail produc-
tion in the iron. cotton and other in
dustries that danger is being reduced
to Il minimum There is little doubt
that when the monetary situation i'm
proves the conditions of general busi-
ness will be found fairly satisfactory
and sound. 1t is universally recognized
that costs of production are too high
and must be reduced. 1t is also recog
rizcd that we are in for a period of
business depression of greater or less
extent. The heavy curtailment OF pig
iron production. the partial closing of
factories and the discharge of many
employees, as we'll as the postponement
of many enterprises are all uncontro-
vertible evidences of reduction But
this can be endured and the necessary
readjustment effected without great in
Jury, provided it comes gradually and
is generally foreseen. 1t is the un-
expected troubles that do the most in
jury; those which are anticipated can
generally be guarded against.
on the stock exchange there was con-
tinued depression owing chiefly to high
rates for money and to further liquida-
rates being from to IL per cent and
even higher The forced contraction of
credit is accompanied by frequent call
ing or shifting of loans, and this in
turn compels a steady stream of liqui-
dation. From the interior the demands
for currency are still insistent in spite
of gold imports and large additions to
the circulation. About s43,000,00O of
gold have thus far been received and
the movement is now expected to reach
$S0,000.000, the bulk of which we may
have to return next spring. A fortu-
nate circumstance was the refusal of
the Bank of England to raise it's rate
from to 8 per cent such action hav-
ing been expected in order to stop the
American scramble for gold.
Values Too Low
Much of the weakness shown during
the week was due to liquidation of
parties who We're tided over when the
panic was at its height in order to save
them from unnecessary sacrifices. In
evitably there must be considerable
selling from such sources. The scare
ity of money also is compelling the
selling of securities to meet subscrip-
tions on new issues which are due
within the next sixty days and which
must amount to considerable sums.
Happily, the process of recovery has
begun already, and easier conditions
are in sight. Meanwhile, the only solu-
tion appears to be that of allowing
events to take their natural course
with as little artificial interference as
necessary That is certainly the best
method for the elimination OF weak
spots as we'll as for the laying of safe
foundations on which to base a new
forward movement when the time is
ripe On the other hand. it should not
be overlooked that there is an increas-
ing short interest in the market; that
the declines have been extreme, and
that good securities are selling far be-
low their intrinsic value. These are
times of great opportunity for the
genuine investor; since, while prices
may touch a lower level in case of fur
ther difficulties in the money market
the decline surely will be temporary in
the better class of stocks and bonds
! Sctual Investments made on the breaks
Hereafter can scarcely fail to prove ex-