The San Francisco call., 1908-12-07
MOVEMENT OF GOLD
TOWARD FRANCE
C0ngested Condition OF Money
Market Shown by Outward
Flow of Metal
Stock Market During the Week
Shows Play of Strong Con-
tending Forces

NEW YORK, Dec. 6.-The stock mar
ket, a medium for the expression OF
speculative opinions showed the play
of strong contending forces during al
most the whole Of last week. There
were days of marked strength and days
when opposing movements were going
on at the same time in great con-
fusion.
The opposing opinions ranged them
selves broadly on the conservative
view of danger from overspeculation
OF the security of the abundant money
and banking resources TO sustain the
speculation the other.
The principal avenue of absorption
of available resources at present is
through the issue Of new securities,
which have succeeded each other In
rapid succession to the extent of sew
eral hundred millions of dollars in the
last few weeks. with prospect of i'm
portant issues still to come. The readi-
ness with which these new issues have
been absorbed and the large resources
of capital waiting investment thus in
dicated have been pointed to as one or
the strongest features of the situation.
Means are thus assured for resumption
of projects of improvements involving
outlay for supplies. which must stimu-
late greatly the consumptive demand
for extensive lines of commodities.
REFUNDING OBLIGATIONS
While this is obviously true, there
is the modifying consideration that
large proportion of the recent new
financing is in the form of refunding
of short time obligations which were
put out by the great corporations in
the period of financial stress from
which the country is emerging. and
for which. extravagant rates of interest
were being paid. The new financing
reveals material relief from the enor-
nous rates paid on the earlier tenn
porary obligations, but the prices at
which the new securities are sold fail
to demonstrate the full re-establtsh-
ment of the former easy terms of bor-
rowing. even for the long fixed periods
Another source of pressure involved
in the sustained high level of prices for
securities comes from the persistent
liquidation of foreign holdings of
American securities. Remittances in
payment for these have carried Ameri
can exchange to the gold export point
and have started movement of gold TO
France The outgo of gold al this time,
when the tide of exports and merchan-
disc usually carries the movement the
other way. and in a year when the eX
cess value of merchandise exports has
run far in excess of any precedent. Isl
in its effect, striking testimony of the
congested condition of the money mar
ket in this country.
REASON FOR CONGESTION
This condition is due. of course, to
the fact that the huge injection into the
circulation to meet the panic require
ments last year has never been sub
tracted again, while the activity of
trade has not been restored TO a degree
that makes anything like the former re-
quirements for currency or credits. Oc-
casional misgivings are expressed by
bankers and by the more influential
class of fnanciers over the signs of ar
tificial stimulation for speculation
growing out of this state of affairs
They are emphasized by the feeling
that the rate of trade revival is over
estimated.