East Oregonian : E.O. (Pendleton, OR) 1888-current, 1908-09-04
MONEY YC0MES WEST

WUWLl UUWCJ Will
!. New York. Sept 4.--By far the
most important element in the stock
market just now is the worldwide
ease in money, This case is not so
much a consequence of increase in
the gold supply as some would have
us believe. although that factor cam
not be ignored. The present glutted
condition of the money market is
chiefly Attributable to the accumula-
ton of funds which always follows a
panic, regardless Of the production of
gold. Business activity has been at a
minimum and funds came out OF
boarding as confidence revived. These
two movements caused a piling up Of
idle funds in the banks. which now
hold extraordinary reserves in spite
of the fact that the crop movement
ras begun and that usually currency
Is flowing freely to the west and
south at this season. They also ac.
count for the record-breaking accum-
ulation of gold in the American and
European banks more than the enor-
nous production of the Rand district.
What is the effect of such an ac-
cumulation of idle funds? The own
ers must inevitably seek better en-
ployment than afforded by current
low rates on call and time money.
Since confidence, though rising is not
fully restored and caution is neces.
sary in making investments. credit
expands slowly. Only the best bor-
rowers and the best proposals are
welcome at the bank. Discrimina>
ton is still necessary; the result be-
are obliged to invest in the better
class OF securities. Money can. be
much more profltably employed in
these lines than in ordinary lending;
good investments thus become scarce.
and the big speculator with an abun-
dance, of cheap money at his COM
mand is afforded an unusual oppor-
tunty. This explains the present
stubbornness of the market to yield
to artificial pressure, also the strong
undertone shown in the face of un-
favorable news. Cheap money is not
only a powerful but under the cireum-
stances it is the most natural slim
ulant to business that could be eX-
pected. With the prospect of low
rates of interest for several months
to come there is little chance for any
important reaction in either financial
or mercantile circles. certainly not
until money rates advance or reac-
ton is produced from causes not yet
apparent.
All the European banks, it will be
noted are accumulating gold. and
combined they are carrying the larg-
est stocks of the precious metal on
record Our crop situation continues
satisfactory. Corn is making good
progress. and If early frost is escaped
a full crop at profitable prices is al
most certainty Wheat is also
threshing out better than expected
and now justifies the earlier expec-
tations of a full yield. oats are
somewhat Of disappointment, and
cotton has been injured to the extent
OF 4 TO points during the past
month In the agricultural. indus
trial. mercantile. financial and. politi-
cal fields all the tendencies are Of a
hopeful character. Stocks, however,
are now very high, and offer tempt
ing profits to holders of long stand
ing A further advance may be in
prospect; but those with big gains are
likely to step out before long and
leave what profits remain to the late
buyers. Investors may therefore
await more favorable opportunities
while speculative buyers will have to
exercise much discretion.
HENRY CLEWS