The Cairo bulletin., 1908-01-06

with our leading business men in
lsober frame of mind and general,
anticipating some trade reaction
This Is due to recognition Of the fac
that the liquidation and readjustmen
which has taken place In the stool
market must to some degree be ex
pected in mercantile and industrial
affairs; and while nobody expects
such a severe reaction in the latter
circles as has taken place in Wal
street, still IL is now admitted that the
mercantile credit situation is badly
strained and that lower level foi
commodities must be attained before
general business can show any sub
stantial tendency toward recovery
That the process of REIMBURSEMENT in
mercantile and Industrial affairs has
begun is very evident, and how long
| 1t will continue depends upon how
| far corrective influences are allowed
to have free play. Wall street was
obliged to endure nine months of
acute reaction, and it is possible that
the period of reimbursement in mercan-
tile affairs may occupy a few months
to fully straighten things on a per-
manent basis
1t does not necessarily follow that
sympathy with depression elsewhere
Wall street has often been notable
for anticipating the future and run
ming counter to conditions prevailing
elsewhere. The financial panic began
and ended before general business
left its affect; the security markets,
therefore, are fairly entitled to re-
covery while the storm is spending
its remaining force elsewhere. During
1907 securities showed a depreciation
estimated at over $3,500,000, 900, a
shrinkage which not only discounted
the various forms of OVERRIDING and
mistrust that precipitated the panic
but also the possibility of an era of
business depression 1t must not be
forgotten that values were sacrificed
and unduly depressed by tremendous
forced liquidation at time when
buying capacity was completely ex-
hansted, During the past month
prices have been gradually recover.
ing; not through speculative buying.
but from the natural tendency to at
tain level consonant with the
changed conditions; and this after
making full allowance for the pros
rects of diminished profits and lower
dividends, which are practically sure
10 be encountered The most import. |
ant fact in stimulating recovery is
the improved condition of the money |
market. The currency premium has
disappeared. Our bank re-
serves are rising and very soon the |
market will be working under |
Usually experienced in preparing for
January disbursements did not ma
this year. Currency will
shortly begin to return from the in
.erior; and the lessened activity In
business, together with declining |
PRICES. will quickly rebuild our bank
'eserves and leave us with plethora
If cheap funds greatly augmented by
he additions to our currency supply
Turing the last few months. Our
supply of gold has been much aug.
nented by recent importations; and
he prospect of it's retention has been
improved by better finan-
ial conditions abroad. The Bank of L
England is in strong condition, as en-
,hasized by reduction of its rate from
to 6 per cent. and Loddon was very
lightly hurt by our panic. Germany,
90. is In better condition, and seems
likely TO escape the financial crisis
nee feared: while France appears
otally undisturbed by our recent
nancial crisis. 1t is worth noting.
lso, that better feeling is develop
ng on the other side regarding Amer
can securities, owing to the fact
hat we are righting the abuses of
Encouragement which did more to
iscredit us abroad than the vicissi.
udes which came from legitimate
economic movements. American Sc
urities have always been profitable
D foreigners. and as long as they
re financed on sound principles and
y men of integrity. they will con-
hue to enjoy high reputation
mongst foreign investors. In esti-
hating the future of the money mar
ct. while not overlooking the un-
ettled business outlook nor the un-
railroad situation 1t must
OF be forgotten that the coming ease
! money Will exert a very important
fleet upon security values. There
re many very WEALTHY individuals
Tho are only indirectly affected by
usiness reaction and having large
ieans will be sure to take advantage
easy money. When money is In
lrge supply at low rates, as will be
he case before very long, speculation
levitably reviyes and more or less
lfiation follows. This is another rea-
on why the stock market often dis
lays activity and strength when de-
ression and stagnation exist else
here.
Our foreign trade is showing not