The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1910-12-19


has euieting effect upon business.
The financial outlook, however.
though not entirely free OF shadows,
has its encouraging features. Chief OF
these is the ease OF money. What with
contraction of credit, retrenchment in
expenditures, dizziness of trade and
lessened speculative activity, the sup
ply of loanable funds is steadily accu-
mulating, and unless business recov-
cry develops after the new year, there
will be a glut of idle money. This,
however, is the usual swing of affairs
following any period of extraordinary
activity. II is also one of the most
natural and efficient cures for bust
ness depression. AS long as general
conditions remain southland there is
no reason to consider them otherwise
money will gradually come back in
TO circulation. flowing through the ar
teries OF commerce and performing its
useful and beneficent function in re-
storing business ACTIVITY. Low rates
of interest indicate insufficient en-
| pioyment for money. Funds, however
will not long remain idle on low re-
turns. If not required in actual bust
ness, money will soon seek investment
| in high grade securities. AS the lat
! ter were the first 10 feel the depress-
| ing effects of high interest rates, they
will also be the first to feel the slim
! illus of low interest rates. Already
the bond market is beginning to
show the effects of cheap money.
There is a good investment demand
for better class bonds. which today
are selling down at very attractive
level. Before long many of these is
sues will be bringing much better fig
ures, and will in all probability
have been permanently retired into
strong boxes. A number of new is
sues are pending and the majority of
those recently offered have been read
lily absorbed. Our railroads are still
much in need of new capital for the
completion of pending improvements.
and bond issues or short term notes
will probably be the most ready
means of raising required capital. AS
to stocks, there are no indications of
any important new issues. Many of
the high grade issues are selling upon
a per cent basis, and these, too, are
likely to receive more serious atten-
ton from investors. December and
January are always periods or heavy
disbursements on dividends and inter
est account. aggregating this year, it
is estimated over s200.000,00O A
goodly portion of this sum generally
finds it's way to Wall street for invest
ment purposes, and in view of the fact
there should be no falling off in the
demand from this quarter. This is
the basis of the so-called January rise
which occasionally materializes in De
cember. We have already had a
which has probably been the com.
mencement of discounting this move.
ment What the effect of these con.
ditions will be upon speculation re-
mains to be seen. Easy money us.
ually stimulates speculative activity
but leading bankers are known to be
still in very conservative frame OF
mind and disposed to restrain undue
speculative operations. The policy OF
slow and forced liquidation which has
been carried out for the last six months
has been undoubtedly beneficial. II
has checked pace that was altogeth
err too rapid, and has facilitated the
restoration of equilibrium which may
pave the way for fresh activity later
on. ~ sAEN
The feeling is still abroad that val
ues generally are upon an inflated
basis. This may be true of commodi
ties, but not of securities, which are
now selling considerably below high
levels. AS to commodities some re
action has already set in, particularly