The sun., 1909-01-04
THE FINANCIAL SITUATION.

frlCe5 OF securities week ago TO-DAY
enjoyed notable recovery. based seom
ingly upon a general increase Of business
and financial confidence in the long in
terim Of Stock Exchange business owe
the Christmas holidays. Throughout th'
remaining four business days OF the woeS
the market was in substance another
holiday affair. still maintaining, however,
an exceedingly strong undertone anc
closing at the highest prices seen since
November, 1907. There was cartain
amount Of profit taking naturally, arising
from the fact that within two or thret
days the market had entirely regainod
the losses incurred through saggine
period lasting for months time. But
the really surprising matter. so far as
purely speculative movements were con-
cerned, was that in view of the usual
eSigencies at the end of the year the mar.
ket did not decline in any way worth
speaking about. but hold itself with great
steadness. The noteworthy feature oi
the general market was tho extreme
strength Of bonds. and II is undisputec
that the large purchases made OF this
class OF securities were due to Investment
buying. The demand for bonds which has
been especially in evidence since the close
OF the Presidential campaign has been the
backbone of the present security market
Presumably this demand has been princi
paily stimulated by the current cosy
money conditions, but it would not have
been exhibited nevertheless, II people In
the country were fearful Of the business
future. What is important to noto from q
strictly financial point of view Is that the
buying power of the kind stated has al.
ready been sufficient to allow most Of ouI
railroad companies to refund their natlr.
ing obligations, short term and otherwise
and also to allow these and other com.
panies TO obtain money needed for genera
business use; and 1t ought to be renem.
bered in this relation that this great and
satisfactory accomplishment has only
been made possible by the very slackenine
Of miscellaneous business throughout the
country of which complaint is heard.
Litterly the money market has been a
little iirmer. giving rise 70 predictions
on the part OF ultra pessimists Of some
thing Of squeeze in rates when the day
actually came for a final gathering in
Of funds to meet tho January payments
But no such stress nor anything resem-
bling II put in an apr earance, and 1t is uni
versalIy declared in banking circles that
money will remain easy through the
present month and for an indefinite
time to come There is no sound reason
for questioning this judgment, even in
view OF the shocking calamity in Sicily
upon which the attention and sympathy
OF the civilized world are concentrated
Terrible as the catastrophe Is the money
loss involved in it cannot, according to
those best fitted to judge, be a matter OF
international financial importance.
Not for many years has it been so easy
as in the present instance to make gener-
alizations regarding the course OF business
and finance in the twe!vemonth just
ended. Events he'e may be summed
up in the brief statement that since the
closing days Of November 1907, when
the stock market depression touched its
lowest pitch, the history OF the financial
mark cts has been that oftf slow but contin-
uous Improvement, and this improvement
has been such that pretty nearly three
quarters of the previous fall in marke:
valuations has beoa regainsd. Follow
ing the panic came OF course time OF
business stagnation. out OF which IN
due season the forces OF recuperation
emerged. These also, just as their sister
powc,s in the stock market. have steadily
developed strength. the greater buoyancy y
being naturally shown by the latte
There are two observations which $50
70 press themselves, more promine ltly
than Others upon the minds Of taoss who
have given thought and study to the
economic development Of the year.
The first OF these is that the panic Of 1901
with It's seluelD in 1903. was more of a
financial than a strictly business affair
and that il bore more resemblance to the
occurrences Of the year 1908 than Of any
othe. in our records. 1t is NANTES: that
the troubles of l9C7-Os we're Of more serious
nature than those of 1908 and that the @
were many points Of similarity betw cen
them and those OF the famous difficulties
in 1898 But the points of difference be-
tween our reccnt difficulties and those of
fifteen years ago are even more numerous.
There was not last year or the year before,
as in 1898, a general spread Of disaster over
the country Cases of individual poverty
and distress have not been nearly so fire.
ouent this time, or in other words the COL
lapse of business and finance has not been
nearly 80 general. The 1907 -0s depression
was caused almost entirely by financial
which did not invlove
the people Of the country as whole and
was to a very considerable extent rich
man panic, one reason for this being that
Just previous to 1907 there was a strong
tendency among conservative business
men 10 take in sail. On the Continent
of Europe an undue imitation Of busi-
ness enterprise was much more marked
in the times Immediately preceding 1907
than in our own land, and it is undoubt-
edly because of this that business de-
preston proper is now more accentu-
ated in Europe, at least in England and
Germany, than in our own country. OF
course the restriction of financial re-
sources enforced in the United States bore
heavily in many business directions,
making il impossible for the railroads to
obtain supplies OF money that we're almost
necessary and cutting down
their freight and passenger traffic 70 an
enormous extent. Still, the less rigorous.
conditions of the last year and those of
1908 are to be seen in the relatively small
number of railway receiverships neCessi-
tated in 1905 a. compared with those of