The semi-weekly messenger., 1908-01-07
A FINANCIAL RKvIEW.

the country.
II says the -o:ose or the year hnds
US energeticaliy struggling 20 emerge
from one of the most disastrous fnan-
cial panics in history, and it goes on
TO give the causes Of that panic
Among those chief causes II men
tions general ovc--doing. oyer-exten-
sion OF ere lit, speculation. over
issue OF securities. great industrial ex-
ransion. excessive underwriting
schemes. excessive mining and real
estate speculation, earthquakes NJ
home and abroad. Japanese and South
African wars. general public extrav-
agance. exhaustion of floating capital.
distrust induced by corporate misman-
sgement and the hostile attitude OF po-
litical leaders and legislative bodies
a: home stimulating erroneous pre-
judice against wealth" These are
causes enough. goodness knows TO ere
ate a much worse panic than the one
from which the country is just emere
ing.
That the country is really emerging
from the financial straghts OF the
last few months, according to the
views of the publishers of the letter,
is shown by the declaration that
these conditions. however. are now
matter of history and OF little in
terest except for the lessons they con
vey," declaring that 1t is OF first i'm
portance TO recognize that a COM
plete change Of base has taken place"
and that the business world must now
be concerned in adjusting itself TO new
conditions
The letter says that we have been
suddenly precipitated from higher
level to lower and the sooner this
vital change is admitted and conform
ed 10 the prOmpter and sounder will
be the resumption OF business activ-
ity"
The worst consequences OF the panic.
the letter says, have been limited 10
| financial circles.
The safety OF the country is based
on the satisfactory condition Of our
great industries, which, with their i'm
mense output. have not reached the
size of over-prcductioh. says the letter
The American farmer raised crops val
ued at $7,40O,OOO 900 He is out OF
debt and so we'll situated financially
as to be comparatively Indifferent re-
garding any business recession in the
| country. The fact that thirty-five per
cent. of our working people is ell
gagged in agriculture shows that the
farmer is the backbone OF the coun-
try"
In manufacturing the growth has
been enormous, the products for the
year exceeding SIC 900 900 900. This in
dustry, however, feels the panic more
than the agricultural.
In manufactures the country pro-
duced $3,OOO,OOO,OOO worth of food
products and about the same amount
of clothing of all kinds. with no over
production in either.
On the financial conditions of the
railroads the letter says:
railroad managers have some
knotty problems to solve during the
coming year. During the ten months
ending October 1Z0 roads reported
gross earnings of $4,000 900, an in
crease Of nearly $4,000 900, or almost
per cent compared with that Of the
previous year. This would be emi-
nently satisfactory did il not belong
TO the past. The rate at which cx-
penseS are increasing is illustrated in
the returns for October which showed
gain of $13,000,00O in gross, but a
growth OF S17,OO0,000 in expenses
and nearly $4,000 600 loss in net This
enormous increase in expenses. which
IS not confined to railroads. is OF
course due to the rise in materials and
labor and is a serious matter. espe-
cially considering the probability Of
some shrinkaga in traffic. Our rail-
roads have also been seriously embar-
rassed by other considerations. such
as limitations of the money market,
and hostile and unwise state legisla-
ton. Besides they found themselves
unable to finance many Of the inn
provements made imperative by the
growth OF traffic; over s250,0O0,000
OF short term notes having been issued
during 1907. These improveme nts are
still Incomplete, and mary will have
to be indefinitely postponed until more
favorable conditions.
The letter says there is but little