The Cairo bulletin., 1909-10-11


summer. The farmer, it is true, will
secure good profits for his corn; but
how about the consumer who, obliged
to pay more for pork, beef. eggs,
chickens, eggs, etc, into which corn
enters, will have that much less to
spend in other directions? The same
may be said of wheat, the world S
surplus of which is at very low ebb /;
hence present prices. A larger crop
would have proved highly beneficial
inasmuch as the money result to the
farmer would probably have been
quite as large as under present scarci
ty, and the country would then have
possessed surplus for export with
which to pay for heavy current mer-
chandise imports.
Business.
This brings us to a new condition
which has not been sufficiently appre
ciated. The impediments to exports
of cotton and wheatare likely to be 4
serious factor in our international
trade. Business revival is causing
unusually large imports, while our eN-
ports are abnormally low for the rea 5.
ons Of scarcity Just specified. This
means the piling up of q heavy debit
balance abroad. Our borrowing In
foreign markets are already reputed
to be in the neighborhood of 100000,
000 and if to this be added our unfaV
orable trade balance il is plain that
we are rapidly becoming very heavily
indebted to Europe. Foreign banEe >
have already taken alarm. as showi
by the advance in the Bank OF Eng
land rate, and are shutting down
sharply upon our speculative borrow
ings, which have been transferred
from New YOdk to Europe. Whether
we shall settle this Indebtedness in
merchandise exports (Which seem i'm
probable), in securities or in gold it
is impossible to predict, Ordinarilj
the conditions should favor gold i'm
ports at no distant date. but the out
look in this respect at the moment Is
distinctly uncertain. The continued
loss of the precious metal though no.
yet at the danger point is suggestive
for it weakens the foundation OF cred
it at a time when the currency is be,
ing inflated by the continued Issue Of
bank notes. the increase in currency
October | amounting to $4,000, 000
during the past twelve months. Our
national bank loans are S37o80O, $50
eraeter than a year ago, while their
cash reserves are $14,000,G00 lower,
The Bank of England and the Bank
of Germany also report declining re.
serves, and even Paris is DESTROYS Of
strengthening its position, despite the
dullness of business in France. This
world wide stiffenng of money after
an excessive expansion Of loans, es
pecially in the United States, is sig
nificant and must have a restraining
influence upon speculation.
Stocks.
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
ind the public seemed slow to share
the load of the biz spectators in spite
of the bait offered IN the form OF in
creased dividends. AS stocks are still
largely held by strong men the situa
ton can hardly be called a dangerous
one, although very considerabl
liquidation in steel issues has taken
place. The fact that investment buy
ers cannot be found at the present
level is a suggestive one and means
that holders must eventually adjust
themselves to investment conditions.
These are being materially altered by
the continued rise in money. Stocks
that looked cheap on three per cens
money market lost their attractive
ness when rates rise to and 5 per
cont, AS firmer but not stringent
money is to be expected 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 to-
wards lower prices, especially for fan
cy stocks and those which have over
discounted the future.
HENRY CLEWS.