The Paducah evening sun. [volume] (Paducah, Ky.) 1906-1929, 1908-12-23

'~"ihNu u AZ FNA Wv
and less, dividend paytrg stocks APP
peared particularly cheap The ac-
emulation of idle money following a
panic has always been a powerful
stimulant for recovery, and this year
cheap money had more lifting power
than in previous panics because of its
larger supply and the fact that the
panic had less serious effects than
usual in industrial and mercantile
pursuits. II Il be conceded that
cheap money was the main cause Of
the rise, II follows that the mainten-
lance Of that rise largely depends up
on the continuance of CHEAP money.
Il is Just here that the stock market
shows its weakest point. All indlca-
tons suggest a slow but sure harden
ing Of money rates. The stiffenine
which usually accompanies prepara-
lions for January disbursements is of
course only temporary and should
disappear by the middle of next
month. But there are other and
more permanent influences at work
which mean higher interest rates.
Chief among these will be the new
demands for capital. In the first
eleven months OF this year the new
security issues were estimated at
about $500. 900 900. against ST.
200. 900 900 the same time last year.
OF this total two-thirds. roughly
speaking, were railroad issues. Dur
Ing the next few months still larger
applications may be expected. because
the necessities of the railroads are
far from satisfied. and It must be re-
membered that financial operations
were very seriously deferred by the
panic. Now that confidence Is being
restored, such negotiations will OF
course be resumed. This means both
material increase In the supply of
securities and higher rates Of inter
est: conditions which Il is needless TO
point out are not favorable to still
higher prices. The future OF the
money market, however, will be af-
fected by additional considerations.
A larger mercantile demand for funds
Is sure TO develop next year with the
Improvement in business, and this de-
mand must Inevitably be met. Agala
the reserves of the Associated banks
are showing almost sensational de-
clines. Good exports have been re-
sumed and may be- expected to con-
/ In H. e
sufficient supply OF grain and cotton
bills We must send gold 10 I'LL the de-
ficiency. We cannot expect to ship
securities to any great extent az these
prices. since Europe has been selling
Americans and bluntly telling us we
are on too high a plane Hence. with
| increasing demands for money. dis
appearing bank reserves and prospec-
tive gold exports II follows that
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 plenty OF
stocks for sale. and are seeking relief
Through bringing in the public. About
the only advantage ON their side Is
the prosperous outlook To- railroads
in 1903 The future in this respect
Is undeniabiy bright All the roads
have put important economies into
effect. and with the advances in rates
already or about to be enforced they
are sure OF liberal gains IN net earn
ings whether the volume OF tranic
goes back to 1897 records or not
This policy OF course insures the
maintenance OF dividends and Is the
source OF all increase rumors The
fact, also. that the public attitude TO-
wards railroads Is becoming more
reasonable has a favorable effect up
on 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. II Is quite within the power
Of the present leaders 20 manipulate
prices still higher. though healthier
and more effectual policy would b. 10
permit a reasonable decline This
would stimulate activity. attract new
buyers. broaden the market aud
make a more successful distribution
OF congested holdings possible. As
said in previous advices, the market
has been bulled to a standstill The
movement for months has been all IN
one direction; and no permanently
successful operations we're ever car
ried out on such lines. The market
requires frequent to-and-fro move
ments. which would secure a much
healthier and more legitimate distrib-
ution OF stocks. Under present
highly artificial conditions both IN