The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1908-07-05
REASONABLE HAS
BEEN RECOVERY
Henry CIeWs Says Trade Con-
ditions Are All That Could
Be Expected.
ELASTIC CURRENCY NEEDED
BANK RESERVES ARE PlLING UP,
INDICATING NEED FOR CHANGE
IN THE CURRENCY SYSTEM IN
VOGUE.

months OF the year nave closed, snow
ing a degree of recovery from the Oc-
tober panic which fully equals, if not
surpasses, all reasonable expecta-
tions. 1t has been period of some
what painful conyalescence, but the
improvement has been pronounced and
substantial, and if sustained for the
remaining six months of the year, will
go far toward obliterating the effects
of last years disasters. OF course
there are many unsatisfactory fea-
lures still remaining; trade and indus
try are restricted, and more or less dis
appointment and discomfort prevail
In consequence. Unfortunately it
cannot be said that the process Of re-
adjustment is complete; contraction
has been unduly severe in some direc-
tons, and very inadequate in others.
Consequently the evening up process
must still go one, and additional time
will be required before conditions are
restored to the normal. On the other
hand, it is a matter of congratulation
that some very important danger
litical crisis has been averted: public
opinion is becoming more sane in its
attitude toward corporations, and all
indications point to the election of
Mr.. Taft as our next president. Bus
mess failures have been much less Sc
'rious than at one time feared, and the
credit situation shows vast improve
ment over a year ago. Financial in
situations which fell under the strain
of the panic have mostly resumed,
and our banks, are as a rule now ex-
ceptionally strong. This does not by
any means complete the list of favor
able developments. So much liquida-
ton and housekeeping have taken
place that the financial situation has
been greatly clarified, although fire.
quently at the expense of losses and
difficulties which naturally cloud the
vision of those upon whom they have
FALLEN with great severity. A great
deal of the depression which now ex-
lists is confined to those who have
borne the brunt of the panic. Those
who foresaw its coming, and trim
med their sails accordingly, are in a
much more hopeful frame of mind,
and confidently look forward to
sure, If slow, approach of better times.
In the stock market activity has
been on limited scale as usual pre-
ceding holiday. About $3.50 OOO. 900
are being distributed in dividends and
Interest payments, a fair portion of
which will as usual seek reinvestment.
railroad earnings are in exceedingly
unsatisfactory shape, current reports
showing very heavy declines: and in
spite of large reductions in expenses
net results are very disappointing,
Many roads it must be remembered,
have materially increased their obi
cations by the issue of new securities
during the past year, and as a result
feel the stress of hard times more
keenly than they otherwise would
have done.
Inc crop movement has already be-
gun. This will make increasing de-
mands upon the railroads, as we'll as
providing a stimulant to other traffic
The most unfavorable feature in the
situation is the crop situation: ton
much rain, and low temperature dur
ing the last three weeks having made
corn very backward. and caused de-
crease in acreage in many sections.
our bank reserves are piling up rap
Idly, and have now surpassed the rec
ord. touching 100000 900, or Sf20-
100000 more than a year ago. This
plainly illustrates the desirability of
an elastic currency system. III which
we are sadly lacking. Our currency
should now be contracting because it
is more abundant than needed In
stead 1t is expanding at a time when
not wanted, because regulated by the
bond market rather than by the de-
mands of commerce and industry. AS
a result there is a tendency to infia-
ton. which is apt to retard rather
than accelerate a healthy and perma-
nent readjustment to new conditions
This over redundancy of funds is a
more powerful element in the securi.
ty market than is generally appreciat-
ed. Briefly, stocks are in strong
hands, the floating supply is light.
liquidation has been thorough, weak
points have been thoroughly eliminat-
ed. and the big. men find little diff
Guilty in supporting the market
against all attacks
Political scares and crop scares
must be anticipated. There is also a
possibility of labor troubles in the
event of an attempt on the part of
the railroads to reduce wages. since
1t must be remembered that organized
labor has not yet accepted its share
of the business reaction which has
lately fallen upon the country. But
aside from these three danger points,
there is nothing in the situation of
sufficient Importance to counterfeit
the influence of an unlimited supnIv
of abnormally cheap money. which is
still the controlling element in the
stock market.
HENRY CLEWS.