Lewiston evening teller. [volume] (Lewiston, Idaho) 1903-1911, 1908-12-25

year cheap money had more lifting
power than in previous panics be
cause of its larger supply and tn,
fact hat the panic had less serious
effects than usual upon industrial
and mercantile pursuits. If it b.
conceded that cheap money was tn,
main cause of the rise, it follow:
that the maintenance Of that rise
largely depends upon the continu
; ance of cheap money. 1t is just here
that the stock market shows it
weakest point All indications sug
gest slow but sure hardening OF
money rates. The stiffening which
usually accompanies the prepare
tions for January disbursements is
Of course, only temporary and should
disappear by the middle OF next
month. But there are other and
more pertinent influences at work
| which mean higher interest rates
Chief among these will be the new
demands for capital In the first ell
even months Of this year the new Sc
curity issues were estimated at about
$500, 900, 1000. against $1,2OO.0O0,-
900 the same time last year OF this
total, two thirds, roughly speaking.
were railroad issues. During the
next few months still larger aprli-
cations may be expected, because the
necessity of the railroads are far
from satisfied and it must be re-
membered that financial operations
| were largely deferred by the panic.
Now that confidence is being restor-
ed. such operations will naturally be
resumed. This means both a mater
ial increase in the amount Of Sc
curities and higher rates OF interest
Conditions which it is needless to
point out are not favorable to sill
higher prices. The future OF the
money market, however, will be af-
fected by future considerations. A
larger mercantile demand for money
is sure to develop next year with the
improvement: in business, and this
demand must inevitably be met.
Again the reserves of the associated
al declines; gold exports have been
resumed and may be expected to con-
tinue, because in the absence Of
sufficient supply Of grain and cot
ton bills we mus: send gold to fill the
deficiency. We cannot expect at
these prices, since Europe has been
selling Americans and bluntly tel
ling us we are on too high a plane.
Hence. with increasing demands for
money rates must work gradually
higher.
On the side Of higher prices we
have the resources and the abilities
OF the strongest leaders the Street
has ever seen. They still have plen-
ty OF stock for sale and seek relief
by bringing in the public About
the only advantage on their side is
the prosperous outlook for railroads
In 1909. The future in this respect
Is undeniably bright. All the roads
have put important economics into
effect. and with the advances in the
rates already or about to be enforc-
ed they are sure Of liberal gains in
net earnings whether the volume of
trafic gets back to 1907 records or
not. This policy Of course insures
the maintenance of dividends and isl
the source Of all increase rumors.
The fact. also, that the public atti-
tude towards railroads is becoming
more reasonable has a favorable ef-
feet upon values. Here. however,
the list of sound bull arguments
ends. The fact remains that the
market is above its natural level;
especially when measured by the
final test Of interest rates, 1t is
quite within the powers Of the pres
ent leaders to manipulate prices still
higher, though a healthier and more
effectual policy would be to permit
reasonable decline This would
stimulate activity. attract new buy
ers. broaden the market and make
more successful dist ribution OF the
congested holdings possible. AS said
In previous advices. the market has
been pulled to a standstill. The
movement for months has been all
IN one direction: and no permanent
~ successful operations were ever
carried out on such lines. The mar
ket requides frequent to-an-fro move
ments. which would secure a much
healthier and more legitimate dis
tribution OF stocks. Under present
highly artificial conditions both in
vestors and spectators must operate
with exceptional discrimination. or
later on they will ind themselves
carrying high priced stocks on n de-
clining market.