Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1908-07-07
MEMBER OF ASSOCIATED PRESS
@E!assI5ssRa
NECESSITY OF ELASTIC C n
y RENCY,

NECESSITY OF ELASTIC c. n
RENcY. Ia
The present condition of the mon
ey market, says Henry Clews, clear
~ demonstrates the necessity for
more elasticity in our currency sys-
tenn. .*
The first six months of the year
have closed, showing a degree of re-
coVery from the October panic
which fully equals, If not surpasses
all reasonable expectations. 1t has
been a period of somewhat painful
Commissioners. 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.
Money is a drug; both call AMI
time rates being excessively low. Our
bank reserves are piling up rapidly,
and have now surpassed the record,
touching $500, 1000 900, or $12O ,0O0,-
OoO more than a year ago. This
plainly illustrates the desirability of
an elastic currency system, in which
we are sadly lacking. Our curren-
cy should now be contracting be-
cause 1t is more abundant than need
cd. instead it is expanding at a
time when not wanted, because regu-
lated by the bond market rather than
by the demands of commerce and
industry. AS a result there is a
tendency to imitation, which is apt
to retard rather than accelerate a
healthy and permanent readjust-
ment to new conditions. This over
redundancy of funds is a more pow
erful element in the security market
imam is generally appreciated.
Many securities are now as high
as year ago, and this in the face
of business depression nd shrinking
dividends. This can only be partly
accounted for by the spirit of hope
fulness, which shows itself in hold
ing securities for better times which
are sure to come Were it not for
the great abundance of cheap money
many securities would not probably
be selling at their present level.
The market leaders, however, have
unlimited funds at their command
at low rates, and are in a position
70 sustain the market against all
ordinary adverse influences. Briefly
stocks are in strong hands. the
noatlng supply is light, liquidation
has been thorough, weak points
have been thoroughly eliminated.
and the big men find little dificulty
In supporting the market against
all attacks. The bear element in
the market is small, and speculation
Is on a much more restricted scale
tnan usual, for no one cares to part
with stocks when believing that the
worst is over. The technical position
- consequently strong one and
opposed to lower prices; albeit that
current developments are frequently
OF an unfavorable character. Polit-
zeal scares and crop seares must be
anficipated. There is also posi-
pliity OF labor troubles in the event
o. an attempt on the part of the
railroads to reduce wages, since il
must pc 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
9nere is nothing in the situation ot
sumcient Importance to counterfeit
me influence Of the unlimited SUP.
ply OF abnormaIly cheap money
winch Is still the controlling e1e.
ment In the stock market.