Evening star. [volume] (Washington, D.C.) 1854-1972, 1909-08-15
TEMPORARY OR TO STAY?
Optimists See Much to Confirm
Faith in Permanently.
SWINGING BACK TO NORMAL
Squirt the More Noticeable Because
of Rush to Replenish De-
pleted Stocks.


nlent in the general business of the coun-
try is merely a squirt or whether 1t is the
beginning of a steady and sustainable
boom. There are considerations tending
to conflicting answers to the question.
Only time can demonstrate which will
prevail.
That there is forward movement at
this time cannot be denied. 1t has been
discernible for some months past and
empllasi since the passage Of the new
tariff law. The politicians brazenly claim
credit. in consequence. for their legisla-
!, ton. The business men look farther and
recognize other causes.
One natural cause assigned is the fact
that since the panic of, 1907 the attendant
cessation of business has caused depletion
of stocks and facilities. which are now
being restored. This is the more notice
able in the case Of transportation COM
panies whose equipments need replenish-
ing That induces activity In allied ma
chinery and supply trades. That in turn
stimulates the coke, coal, ore and iron
trades. 1t is regarded by some as
question whether this movement is more
than normal. greater than might reason,
ably be expected after such long spell
of depression.
Upon what grounds. then, is expectation
based OF continued Improvement? the
cautious man asks. to which business men
reply: Upon prospect of a magnificent
crop, certainly of stimulation to Ameri-
can manufacturing enterprises, and last to
be named. but first in significance. upon
the essential fact that the country Is so
big. so fertile, SO enterprising, so ire
pressible il you please, that progress can
not long be kept down.
Business men say 1t is that sublime
Yankee faith in the future of the coun-
try and confidence in its resources and In
1x-l~n Hnfr
tive power for an upward and onward
movement in all lines of mercantile. In
dustrial and financial endeavt.. That
there is a tendency in speculative branches
to discount it cannot be denied, but the
Optimsts say that the movement is SO ir-
resistible that discounting cannot check
it.
Lessons Of the Panic.
Thoughtful observers of the situation
declare that the panic experiences have
brought good out of apparent evil. Com
mercial imitation has been checked and
men taught lesson of caution for the
future. Topheavy credits have tumbled
and those that remain stand on firmer
foundations. Managers. boards of direc-
| tors and employers have learned economy,
found the waste leaks and stopped them,
put their plants and institutions upon a
stricter basis. All OF that is said to
make Tor DrORroSS. i nat SucH policy
has been effective is said to be shown in
the declaration of dividends in times when
such distribution was surprising in many
cases. i tt
"All this looks good to the layman; what
then is the reverse of the shield?" asks the
optimist. Whats going to stop us?'' And
the canny Mr.. Conservative thereupon
pipes up and allows that there are two
weak spots in the situation. One he
describes as bank note imitation, with
ff1, Of Ir{x he
try, and the other the possibility of the
balance of foreign trade in our favor
showing continuing signs of abatement
since the beginning of the year.
The United States is running into debt
to Europe steadily. and the day Of settle
ment. it is declared, may bring with it
emba rrassments The future in respect
to this trade movement is absolutely
problematical The new tariff law sets
out to swing the balance this way,
through the medium OF the maximum and
minimum clause, which is expected by
it's trainers TO coerce foreign countries
into taking our goods Its declared pur-
pose is to force foreigners to open their
doors to American goods, without letting
down the bars on this side OF the water
to foreign goods.
The practical working out of the plan
alone can demonstrate the theory. which
theory was controyerted in debate in
Congress. But it was the last resort, it
is explained, and without some desperate
remedy the situation would probably grow
worse.
Source Of Anxiety.
The bank note initiation has been a
source of anxiety for some time to the
conservative observers of the business
situation. The bank circulation at the
beginning Of this month was nearly
$70O,OOOOOO. That is $13O,OOOOOO in ex-
cess of what 1t was during the flush
business period of 1905. OF course. the
growth has been explainable. 1t began
with the Issue of bank notes during the
panic and was supplemented when the
government began TO draw in its de-
posts in national banks, thus releasing
large amounts of government bonds
which were used for basis of additional
bank circulation.
Conservative financiers assert that this
large issue Is dangerous, although the
man in the street would probably fail to
agree with him. But the conservative
insists that this is a menace to the mold
ing of gold In the United States, and
fears shipment OF the precious metal.
Any extensive movement of gold to ku
rope would unsettle finance Immediately
and be reflected at once in business.
Moreover. the ultra-conservative lays
another charge against the bank note
initiation He alleges that 1t swells loans
unduly, which, OF course, he deprecates
always. There is no question as to the
expansion Of loans. The bank figures
show that they are nearly half a bill
hon greater than at this time last year,
and more than $oD.NU,OOO in excess of
the boom period of 19Oo.
Can Say II Told You So.''
These are the considerations which
lead the uncertainty as to whether the
present movement Is but asummer fresnet
or the setting in OF a steadily rising
tide of improvement which is to set a
high water mark of prosperity in the
United States. Different men find DIFF
ferent answers according to their bent
:of mind, whether optimistic or con-
servative, and hardly any of them claim
to reach conclusion based upon absolute
foresight.
If all the favorable conditions continue
and none Of the possibilities Of a halt in
the movement should materlalize. a large
coterie of optimistic prophets will be able
to say, L told YOU So. couple OF
years hence These considerations APP
ply only to the conservative and invest
ing classes. of course, and roll like water
of a ducks back off the spectators
The speculative fever has been rampant
for a month. as every one knows, in
spite of the sage and ominous wagging
of boards The aggressive specu ators
have rushed in daily and made their
turns. The conservatives would shake
their heads, saying. Prices are too
high" and next day find them marked
up a notch higher.