The Evening statesman. [volume] (Walla Walla, Wash.) 1903-1910, 1909-10-13

ed to Europe. Foreign bankers have
already taken alarm, as shown by the
advance in the Bank of England rate,
and are shutting down sharply upon
our speculative borrowings, which have
been transferred from New York TO
Europe Whether we shall settle this
indebtedness in merchandise exports
(Which seems improbable), in securi-
ties or in gold it is impossible TO pre-
dict. Ordinarily the conditions should
favor gold imports at no distant date,
but the outlook in this respect at the
moment is distinctly uncertain. This
continued loss of the precious metal
though not yet at the danger point is
suggestive. for it Weakens the fOun-
dation of credit at time tWhen the
currency is being inflated by the con-
tinued issue Of bank notes, the increase
in currency October / amounting to
SAB, 900. 900 during the past twelve
months. Our national bank loans are
$3.50, 00O,0 greater than a year ago,
while their cash reserves are $4,000
O0e lower The Bank of England and
the Bank of Germany also report de-
clining reserves, and even Paris is de-
sorous of strengthening it's position,
despite the du1lness of business in
France This world wide stiffening of
money afte1. an excessive expansion in
loans especially in the United States,
is significant and must have a restrain
inf influence upon speculation.
Such conditions show that so-called
prosperity is by no means general, but
is unbalanced and mixed with serious
drawbacks. Another Illustration is
found in the copper situation, where
increased consumption has been more
than offset Ey continued overproduc-
tien the metal being sustained at an
artificial level by means of powerful
speculative manipulation. There is no
doubt that business is reviving and
that recovery will progress. but much
of what has been styled prosperity is
nothing but increasing activity. which,
welcome as it is, should not be mis-
taken for return to the boom times of
1906
The position of stock market bulls
was somewhat weakened by the late
break 1t is generally conceded that
prices had been bulled to the limit. and
the public seemed slow to share the
load of the big spectators in spite of
the bait offered in the form of in
creased dividends. AS stocks are still
largely held by strong men the stu
alton can hardly be called a danger
GUS one, although q very cOnSidera BILE !
liquidation in Steel issues has taken !
place. The fact that investment buyers |
cannot be found at the present level is |
4 suggestive one and means that hold |
ers must eventually adjust themselves /
to investment conditions. These are |
being materially altered by the con- |
tinued rise in money. Stocks that look
ed cheap on 4 per cent money mar |
llet lose their attractiveness when rates |
rise to and 5 per cent AS firmer |
but not stringent money is to be eX- |
pected during the balance of the year.
speculation must adjust itself to the /
new conditions, which means that |
sooner or later the natural trend of |
values will be towards lower prices, |
especially for fancy stocks and those |
which have over discounted the future !
OF course sharp breaks will meet with |
stout resistance, for the bulk of ffoaG
ing stocks is still held by strong inter /
ests This means a market of sharp |
and one that will demand /
careful watching by the trader The /
investor can afford to wait, the present /
situation being in his favor. Important /
new fiOatations are imminent having /
been deferred for monetary reasons, i
and it can be taken for granted that !
the big banking interests will not per- &,
nit any permanent break in the mar
ket The speculative situation may
have it's diSappOintments to large hold !
orS, and some securities may still be /
too high, but underlying conditions re-
main sound and hopeful and good raj |
lies are sure to follow sharp declines /