The Cairo bulletin., 1908-02-03

New York, February Special =
Conditions in the stock market are
somewhat conflicting. Stocks shcW
surprising resistance to unfavorable
developments; the latter having beer
so largely discounted by the previous
declines, that easy money proved not
only a very strong support againt re
Inewed depression, but a powerful
stimulus to higher valuations. This
great increase in monetary supplies
which has been so often predicted in
these advices as an inhationary eie.
|ment, is now having its effect. and
largely accounts for the markets re-
sistance to discourageing news. This
week further Improvement has taken
place In the monetary situation. Funds
are returning freely from the interior
and coming back out Of boarding, rails,
ing the surplus reserve last week to
$37 100000 and with the prospect that
it will go still higher before the limit
is reached. A similar state of affairs
exists abroad, the reserves Of the
great banks in Europe also show
ing rising tendency. There has
been worldwide cessation of specu-
latiye activity; also more or less re.
cession in general trade and industry
with the result CT greatly diminishing
the inquiry for loanable funds. This
decline in interest rates comes at 4
most. fortunate time ana mas also ex.
erted strengthening effect upon Sc
curity values in the foreign markets.
British consols have shown an unus-
ual advance and are now quoted at
SG5s, recovery of over 6 points. In
this market the effects of easier
money have been most notable in
bonds. Since the first of aJnuary it Is
that bond sales have In
creased fully rs per cent while trans
actions in stocks have declined nearly
50 per cent. There has also been
good investment, demand for pre-
'erred and guaranteed stocks. Lack OF
has had considerable to do
With turning the investment demand
n these directions, since any business
reaction which may have to be endur-
ed will fall entirely upon the common
shares of railroad and Industrial cor
Dorations.
Business Depression.
The comparative Indifference Of
Wall street to reactionary commercial |
conditions outside is easily explained |
The stock market situation has been |
greatly improved by the tremendous
liquidation of 1907-which not only |
discounted excessive speculation and I
redit abuses eliminating in that |
ear, but also very largely discounted
he probability of a commercial and |
Industrial reaction in 1908. No one
cw questions that we have entered a
'eriod of business depression. 1t Is
My a matter as to how far and how
Ong it will continue. Production is
low being actively curtailed in all the
aading industries, In iron, in textiles
otis and shoes, leather, tobacco and
many other Industries there has been
acre or less curtailment. Prices, too,
re now receding, although by means
t trusts and combinations of various
inds strenuous effort is being made
D delay establishments. The last re-.
ort of the steel trust was perhaps the !
lost striking illustration of Industrial
eaction. According to Mr. Carnegie's
axiom steel has suddenly
roped from prince to pauper." The
nfilled orders on the books Decem,
er 31st were given at 1924 900 tons
be smallest total of any December
ince 1903 A year ago the total OF
nfilled orders was S,4S9,0 900 tons. So
ereve a contraction, which was n
irect result of the panic, can hardly
e expeeter to continue indefinitely
low that the railroads are better able
} finance their requirements, the de
hand for steel products should be
IRE long begin to improve; neverthe-
IS. oldtime activity need not be an
cipated. Railroad earnings are plain
: feeling the shrinkage in traffic
ovember returns showed a gain of
bout 5 per cent in gross earnings.
hile net arnings decreased Is per
INT; and December returns are ex-
ected to be still more unfavorable
ONE authorities estimate that at
'ast 100000 cars are idle In various
arts of the United States. while 9th I
rs state that these figures are consid. {
ably underestimate. Such incidents s
re merely cited to prove that bust I
PISS reaction is a reality and not a
gment OF the Imagination They Z
can that commerce and industry /,
lust go through a process of read
lstment somewhat in keeping with
hat has taken place in securities. =
he readjustment will be much less =
were in commercial circles than it I,
rs ben in finace. because the latter {
as honeyeombed by excuses and I
buses which have no counterpart in
indstry or commerce. Hence the
adjustment in general business viii