The Evening statesman. [volume] (Walla Walla, Wash.) 1903-1910, 1908-01-01

whole is sound. Values have been
abnormally high, owing to various rea-
sons, and some recession is to be anti
cipated. Otherwise. there is no reason
for apprehension from this division OF
industry, save what may come from
curtailment of credit and forced lioui-
dation.
The course of commodity prices has
of late been decidedly downward Ac-
cording to Sauerbacks London record
the best world indicator-the index
number of commodity prices has de
clined from S24 in May, 1907. to 76.7
at the end of November, 1907 This is
a decline of over five points in
six months; the heaviest shrinkage be.
ing in construction materials, food pro-
ducts remaining higher than a year
ago. The yearly commodities average
of 1906 was ~: of 1905, -; and OF
1904, 40; so that we have still some
distance to go before prices approach
their normal level. Our local index
numbers also show corresponding
movements. This downward tendency
of commodities promises to be pro-
longed into the coming year. because
of lessened demand curtailment OF
credit and commercial liquidation. So
far stringent money has had more to
do with depressing values than lessened
consumption. Very soon it will be diff
ferent and shrinking consumption re-
sulting from compulsory economy and
an increase of the unemployed will be
the main source Of weakness.
Gradual Readjustment.
Gradually the money market is right
ing itself. The currency premium is
rapidly disappearing; bank reserves
are rising; and clearing house certifi-
Gates should soon be withdrawn. While
considerable difficulty may arise in
commercial circles within the next 60
days in extending a large mass of ma
turtles, and some failures may ensue
this contingency will simply prove to
be beneficial cleansing process, weed
ing out weak concerns and clearing
the ground for a fresh and clear re =
covery. Before the spring funds should
be freely returned from the interior and
money may become a drug; bringing
lower rates than desirable owing to
heavy increase in currency and the i'm
possibility of contracting when demand
subsidies. So much for the effects of
imitation. Congress owes the country
remedy for the present defective con-
dition of our currency system without
further tinkering or representation.
Failure to do SO will be a gross and
damaging neglect Of duty. There is
no question today on which such con-
fusion of ideas prevails as on the cur
rency question, and Mr.. Roosevelt
might do we'll to place so complex a
subject in the hands of a body of rec
ognized experts; men of ability. repu-
tation and experience. The worlds
production of gold goes on apace at the
rate of about 100000 annually. Our
own stock of precious metal has been
augmented by the recent importation
VI ONcl S1OO.UOoyOOU, 6SiN vi dW IL Ii Jill
the Bank of England. The net gold
movement, however, for twelve months
ending November resulted in an excess
of imports aggregating only $50,000,-
900, compared with $1O4,OOO,OOO the
same time last year. Next spring we
may lose a considerable portion of re-
cent imports.
Estimated Shrinkaee.
There is but little doubt but that
financial depression has passed through
it's most serious stages. Liquidation
has proceeded on an enormous scale,
and the shrinkage in values has been
estimated at over $500. 900, 900. In the
better class of securities depressing
factors have probably been over-dis-
counted. and the tendency is now to-
ward a fair recovery. 1t is not yet
quite clear that liquidation is complete
because of the heavy mass of undigest-
ed securities remaining. Some time
will elapse before the cleaning up pro-
cess is complete. and a good many new
projects will have to be either reorgan-
lied or entirely wound up. The un-
settled condition of credit is also a
element, although this will
disappear as confidence revives. 1t may
also as we'll be recognized we are in for
a period of dividend reductions, al
though this contingency has been large
ly discounted by previous declines. On
the other hand, there is enough in the
of the farming classes and
the comparatively sound condition of
referred to above to warrant
more hopeful views than existed a
month ago. In the efforts to rebuild
we must not expect impor-
tant recovery. The first step to take
is to cease calculating upon the old
standards Of values or from the old
point of view and to candidly recog-
nize that in business values and VOL
ume must be thoroughly adjusted to
the new conditions.
HENRY CLEWS.
State of Ohio, City of Toledo, Lucas
County &C