The Cairo bulletin. (Cairo, Ill.) 1???-1928, 1908-01-13
Special.
New York, Jan. II, 1908.


The tendency of affairs in Wal
lstreet is distinctly towards improve
ment. Confidence is reviving and /;
much greater degree of recovery ha!
already been established than coulc
possibly have been foretold a montl
or six weeks ago This improvement
lis almost entirely due to favorable
Developments In the monetary situa
ton The premium on currency has
finally disappeared and rates for time
money are steadily declining Along
with this movement there has been i
corresponding drop in rates for com
mercial paper, the demand for which
has much improved. The arrangement
lin credit is gradually passing away,
| liquidation has been severe and has
had the effect of releasing large
sums previously locked up in high
priced securities. The return move
ment of funds from the interior has
| fairly begun and will now continue
| for some time to come. There is an
abundance of currency in the interior
and a relative scarcity in New York.
This is demonstrated by the last ma
tional bank statement, which showed
that the banks in the central reserve
cities in order to help during the
crisis allowed their reserves to de.
cline to $32,000,0O0 below legal re-
quirements, while the country banks
carried surplus reserves of over $103,
900, 600. With the return of conf
dence and the resumption of specie
payments, there should be a very
large influx of these funds back to
New York and other reserve cities.
For this reason the deficit in New
York reserves must be nearly wiped
ing averages will probably be the
rule When it is recalled that the
increase in circulation during the last
twelve months has been $l95,000,000,
of which nearly $70,000,000 was added
in December, it will be APPARENT that
a very material increase in the supply
Of loallable funds is imminent at this
center. It is also to be considered
that hoardings in all parts of the
country, estimated at over $270,000,-
900, are being released and will soon
be restored into circulation. In short
we are rapidly running into a period
when the supply of funds viii be more
nearly sufficient for requirements, in
view of the lower prices and smaller
demands than year ago. Ordinar-
lily, a redundant currency acts as a
great stimulus to stock market values,
and no doubt this has been an i'm
portant element in Fastening recov-
cry. 1t Is well, however, to consider
some of the offsets which are likely |
TO oounteract any tendency toward |
excessive monetary ease. In the first
place, there are many Millions of
Clearing House certificates to be re-
tired; next, the government must be
expected to reduce its enormous de- |
posits with the banks, at the first ia.
gorable opportunity; then the trust
which must now submit to
similar regulations as the banks when
LONG a banking business, will be com
lelled to increase their reserves and |
larry them in cash Again, many de-
nands for new capital which were
in the last half of 1907 will /
be forthcoming at the first
)portunity. Some of the railroads
ire in serious need of funds for the
OF improvements which
.annot be delayed; and considerable
naturities and installments on sub
criptions will have to be provided
or. Finally, any undue ease in
money rates would be sure to start an
outward movement of gold and thus
check exceptional weak
ess in the money market. The none
airy outlook therefore, is decidedly
omplex; and while the abnormal
ates which have prevailed during
he last few months will soon be a
natter of the past, and succeeded by
asier rates. there is no reason for
Expecting any prompt return TO ex-
low rates.
There can be no question about the
effect which the. change
! the money market has had upon
The prospects of the lat
er. however, are also Influenced by
Their considerations. There has been
o important investment buying this |,
sason for reasons well understood,
nd much Of the recent advance was,
S might be expected, assisted by
MANIPULATION. In order to stem the
anic many stocks we're bought by !
irong interests. which the latter are
ow anxious To dispose of at profit
is also recognized that the railroad
iiuation is in many respects very IN ,
liisfactory. Already there has been
shrinksge 10 the volume of traffic ,
nd further contraction is antici- /
ated. Expenses meanwhile are run ,
ing unavoidably high. and profits Of !
early all of the railroads have SUI /;
cred a serious diminution. This will A.,
2 partly counteracted by a policy Of /.
economy and Tetnenchment, but Wall
Ireet Is quite satisfied that we are
for a period Of dividend reductions