Los Angeles herald. [microfilm reel] (Los Angeles [Calif.]) 1900-1911, 1908-01-16
WALL STREET SHOWS
BIG IMPROVEMENT
DUE TO FAVORABLE FINANCIAL
DEVELOPMENTS
Derangement of Credit Is Gradually
Passing Away and Normal Con-
ditlons Are Returning-Stim-
uIating Securities
(HENRY cLEwEs' LETTER)

NEW YORK, jan 15.-The tendency of
affairs in Wall street is distinctly toward i'm
provement. Confidence is reviving and much
greater degree Of recovery has already been
established than could possibly have been fore
told a month or six weeks ago. This improve
ment is almost entirely due to favorable de-
velopments in the monetary situation. Inc
premium on currency has finally disappeared
and rates for time money are steadily Deem el.,
ing Along with this movement there mas peen
a corresponding dtop in rates for commerclal
paper, the demand for which has much m
proved. The arrangement in credit Is grauu-
ally passing away liquidation has been severe
and has had the effect of releasing large sums
previously locked up in high priced securities
The return movement of funds from the IN
terror has fair r begun and VIII now continue
for some time TO come.
There is an abundance of currency IN the
interior and relative scarcity in New YORK
This Is demonstrated by the last national bank
statement which showed that the banks IN the
central reserve cities in order to help during
she crisis allowed their reserves to decline TO
s99 OO0 900 below legal requirements, While the
country banks carried surplus reserves of over
stO3 900 OOO With the return of confidence and
the resumption of specie payments there should
he a very large influx of these funds back TO
New York and other reserve cities. For this
reason the defci in New York reserves must
he nearly wiped out, and for some time 10
come rising averages will probably be the rule
When II is recalled that the increase in cir
culation Curing the last twelve months has
been S195 900, 600, Of which nearly NOOOOOO0 was
added IN december, II Will NC opPdiOAN tilfAf :"
very material increase in the supply of loan
able funds is imminent at this center. II is
elso to oe considered that hoardings in all
| parts of the country, estimated at over S2Io'-
| 600 O00 are being released and will soon be re-
stored into circulation. In short, we are rap
| idly running into period when the supply Oh
quirements, in view of lower prices and smaller
demands than year ago Ordinarily, re
dundant currency acts as a great stimulus TO
stock market values. and no doubt TINS mas
| - Mt element Fastening
covery 1t is well, however, to consider some
of the offsets which are likely to counteract
any tendency toward excessive monetary ease;
In the first place. there are many millions of
clearing house certificates to be retired; next
the government must be expected 10 reduce lts
| enormous deposits with the banks at the hrst
| favorable opportunity; then the trust com
panies which must now submit to similar reg
| ulations as the banks when doing banking
| business will be compelled to increase their
reserves and carry them In casn. again. many
demands for new capital which were post
poned in the last half of 1907 VIII certainly pc
| Forthcoming at the first opportunity. Some OF
! the railroads are In serious need OF FUNDS Tor
the completion of improvements which cannot
| be delayed; and considerable maturiues and
| installments on subscriptions Will nave TO DC
| provided for. Finally. any undue ease In
| money rates would be sure to start an outward
| movement of gold, and thus automatically
| check exceptional weakness in the money mar
ket The monetary outlook, therefore, is de-
cidedly complex and while the abnormal rates
| which have prevailed during the last rev
months will soon be matter of the past ana
succeeded by easier rates, there IS no reas9n
for expecting any prompt return to excessively
| low rates .
There can be no question about the stimuli
lating effect which the change IN the MONEY
| market has had upon securities. The prospects
| of the latter however, are also inhuenceo oy
| other considerations There has been no I'M
portant investment buying this season for rea.
sons we'll understood, and much Of the recenl
advance was. as might be expected, assisleu
BY manipulation In order to stem the panic
II any stocks were bought by strong interests.
which the latter now anxious 10 DISPOSE
of at profit. -.
l 1t is also recognized that the railroad situa-
] lion is in many respects very unsatisfactory
i Already there has been shrinkage IN the VOL
une of traffic ana further contraction Is an
4icipated Expenses meanwhile are RUNNING
pnavoidably high and profits Of nearly an o.
/ the railroads have suffered serious diminu-
ton. This will be partly counteracted by
Iolicy of economy and retrenchment. put mau
4 street Is quito satisfied that we are IN Tor
Il period OF dividend reductions and has appaf'
emily discounted that contingency TO It's present
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