The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1910-06-21

Eastern banks will undoubtedly be OBJ
liged to assist in the autumn crop
movement, and have been preparing
themselves accordingly. As a result of
these monetary conditions our bankers
have been forced to look to Europe for
the financing of proposed new security
issues. While money is abundantly
easy in both London and Paris, the
placing of American securities has un-
questionably been delayed by pro-
nounced foreign distrust of the situa-
tion here. On the other side there has
been a growing feeling that sharp
liquidation must take place here, and
lower level for commodities as we'll as
securities be established before Euro
pean confidence in the United States
can be restored. Such liquidation is
now in progress, in fact has already
run to a very considerable extent
Wheat and cotton have shown marked
declines, and the tendency is for still
lower prices, Commodities generally
are declining. Unsatisfactory as this
may be to those operating for the rise,
the country viii ultimately be benefit
ed and the cost of living will decline.
Both wheat and cotton will go outward
more freely and save us from the alter
native of a further depletion in our
gold supply. The situation has already
been materially relieved by this un-
pleasant but curative process.
Our crop situation is fairly satisfac-
tory. The outlook is for full crop of
cotton, and wheat promises well. The
prospect is also for a big hay crop.
The growing season is from two to
three weeks late, which somewhat in
creases the perils from early frosts, still
there is ample time for recovery of lost
ground. and it would be premature to
take discouraging views Of the present
crop situation. Other favorable inhu-
ences are the successful placing of st.
Paul bonds and city warrants in Paris,
the decline in the Bank of England
rate, a good cotton report and a sharp
! decline in imports which with lower
prices for wheat and cotton and foreign
takings of our securities will interfere
with further gold exports. 1t seems
quite certain that Europe will take our
best securities at a price, and present
conditions seem unusually favorable
to the foreign purchaser.
General business is affected adversely
by the reaction in Wall Street, as well
as by general recognition that we are
passing through period of readjust-
ment from the late activity and exces-
sively high prices. Economy is al
ready taking the price of extravaganza.
Buyers naturally hesitate under such
circumstances although thus far there
has been no serious slackening up of
trade. Rather more activity has been
shown in iron, owing to. price conees-
sions, but the future of this industry is
largely dependent upon 3 the railroad
outlook; equipment orders are being
| cancelled, and new purchases of steel
products are undoubtedly contingent
upon the successful placing of Ameri-
can railroad bonds abroad Delay in
the latter will necessarily influence the
steel industry unfavorably.
The outlook for the market is ex-
ceedingly uncertain. Political condi-
tions are unfavorable, and the country
] is threatened with growing anti-rail-
road and anti-tariff agitation for some
time to come. Political leaders are
awaiting the return of Mr.. Roosevelt.
Financial leaders may do likewise
While there is no question that the
general situation is being improved by
liquidation and security values have
already partially discounted the ad-
verse conditions above referred to; the
purchases of stocks, except on the
breaks, can not be safely recommend
ed until conditions become more set
tied. In view of the oversold condi-
tion of the market there will doubtless
be sharp and liberal rallies. but we
still continue to suggest profit taking
upon any pronounced recovery. No
permanent turn for the better can be
expected until improvement in both the
political and monetary situations is in
sight.
The new law under which banks are
allowed to borrow money from the ter
ritorial treasury is working very salts
faetorily. The banks are using the
money about up to the limit allowef
under the act, which provides for an
ample reserve to be always kept on
hand in Treasurer Conkling's strong
box. This week the amount in the
treasury was abont 81 100000 and the
banks had on loan about 100000. This
they are allowed to take from the treas
ury at two per cent interest.
The act works well in more than one
way. In the first place large sum of
money which would formerly lay idle
in the government vaults is now kept
in use in the community, which is a
benefit all round. In the second place,
the treasury office is able to get returns
in interest amounting to about half