Pine Bluff daily graphic., 1908-08-16
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THE REACTION.

Henry CleWS of New YOrk takes the
 position that the most skillful manip- ulation could not have engineered a rise in prices on nearly everything since last November, unless there was
 some good foundation for it. When l the panic came prices fell below in- trinsic value, because of extreme de-
 moralization, and Mr. Clews says that unless history fails to repeat itself
 they are likely to react above intrinsic
 value, because the pendulum invari-
 ably swings back violently before re-
 snming it's normal movement to and
 fro. MT. Clews continues: Now that
 the storm is over we find the financial
 atmosphere much clarified. While the
 shock of panic caused temporary
 paralysis in business, recovery quick
 ly followed. There were no signs of
 general overproduction, such as pro-
 longed the depression which followed the panic of 1893; and in many lines
 of merchandise there was positive scarcity, particularly in agricultural
 products, which has had much to do with maintaining the present high cost of living The big trade con- binations have also had share ill preventing overproduction by the rigorous downs which many of ducts, or lessened production, can hardly be considered a blessing, for abundance is usually better than scarcity as a general principle, but it has had much to do with steady ing of values during the past six months One good result arising from the panic was the effectual stoppage which it enforced upon unsound in- dustrial and financial schemes. Our credit system had been strained to the breaking point by the flood of flotations; and this state of high ten- sion was chiefly responsible for the panic because of inability to with stand shock. This has all been chang ed. New schemes are promptly turned down unless particularly meritorious; our bankers are exceedingly conserv- ative; weak concerns have been greatly strengthened and while good secure all reasonable ac- comm odation bankers are pursuing a policy of great care in the granting of credit. Another factor of more im- portance than is yet appreciated is the great relief which has been lately af- forded to institutions and individuals by the rise in stocks. It is we'll known that some of these would have been forced into bankruptcy had it not been for the recent favorable turn in events. AS it is many concerns have been en- abled to meet their obligations with promptness; and it goes without saying that their resumption Or saving from failure will he benefit cial to the financial community. Tn short the housecleaning process which began last October has been thorough and beneficial. disastrous at it may. have been in some quarters.
 Signs of improvement in the mer- cantile world are more apparent ev- erywhere. Stocks of goods in jobbers and retailers shelves are generally light. Replenishment is necessary. The promise of good and protablfie crops means another year of prosper ity to our agricultural classes who are still the backbone of the country. Next
 to cheap money the most effective
 argument for high prices in the stock
 market has been this encouraging crop outlook. It is also the chief basis of confidence in the mercantile com.