The Washington herald., 1910-02-14

New York. Feb. bit could at least
be said at the close of last week that at
no other time since the declining move
ment in securities began in the forepart
OF October last year was there found a
greater number Of people in the financial
district who are as a rule, successful in
their business operations and correct in
their views Of markets and prices. eX-
pressing the opinion that prices OF stocks
had in a large number OF instances
reached levels at which they could be
called cheap. even considering all the ad-
verse arguments that can he brought to
bear against the stock market at the
present time.
Possibly this statement referred more
strictly to the level Of prices made in
the semI-panlc in the stock market that
prevailed a week ago than to the range
OF values shown in the recovery later on.
But the general truth of the declaration
was still maintained. and it was undoubt-
edly based chiefly upon recognition of the
fact that a great volume Of speculative
liquidation that had been overhanging the
market had been completed.
Prices might vibrate back and forth
for a considerable period. and the stock
market itself become dull for greater
or less length of time, as it usually does
following a time Of Generalization; but
quotations of stocks were, nevertheless,
at points that attracted investment pur-
chases for substantial reasons Of merit
and value.
II was admitted that these prices were
still away above those recorded in the
1907 panic. But no one asserted that con-
ditions were at all like those of the 1891
panic. or in any way such as to excite
fears for the business future.
Conditions Due to Old scores.
In fact. the one decided resemblance to
the situation in 1907 rests in the circum-
stance that the condition of affairs that
now prevails fairly approximates the
stability established as the result OF the
1861 purging and bloodletting Presum-
ably the speculative short interest in the
market rose 10 large proportions on Mon
day a week ago. and the retreat OF this
short interest accounted in no small de-
gree for the strength shown through the
rest Of the week.
But the rise in the market last week
was not merely a covering of shorts"
II was based primarily upon the entrance
into the market upon an enormous scale
on Monday and Tuesday Of investment
buying by savings banks. trust COM
panies. and financial institutions of the
first grade. The point had been reached
where investment was willing TO take
~ .-c h. In,
nest. It was found that there We're levels
al which the various Washington scares
and whatever other drawbacks have re-
Gently presented themselves in the finan-
cial situation. could be discounted and
overdiscounted so far as values were
concerned. This was the real demon
stratiOn of financial interest in last week s
five business days.
Doubtless from a strictly stock market
point of view the most notable change
for the better that has come about is the
thoroughgoing improvement in the money
situation
Most bankers still believe that the busi-
ness prospects for the year are such that
they will make more money by lending
money in the year 1910 than they did in
1909i that is to say, that they will get
higher rates for the use Of their funds
Easy Money Period Coming.
But so drastic has been the market
liquidation and such has been the check.
even If temporary. to general business
expansion also afforded by this that il
IS now reasonably clear that whatever
may happen later on in the year a Pc
riod of very easy money confrOnts US
When money for six months use can be
borrowed at per cent and for over the
year at AZ per cent talk OF tight ,oney
entirely disappears as a financial factor
In Fridays bank statement the actual
surplus reserve was reported as being
$29, ,49O. .725 a very large sum for the time
of year and nearly three times greater
than that shown at the same date in
1909 and that a species Of international
money plethora exists Is shown in the
reduction Of discount rates ordered last
week by the Bank Of England and the
Bank OF Germany.
In Paris, too. money IS again accumu-
IatnC. We should logically expect. there
fore, in due time and in the not far
distant future a picking up in the gem
eral bond market, and some signs of
improvement in this direction were IN
deed apparent last week in the higher
quotations for New York City bonds and
in q larger general inquiry for invest
ment securities in bond houses. It is not
10 be forgotten that investment In the
market was practically stopped SIX
months ago Through well-eounded ap-
prehensions thatthe money situation was
becoming preyearious. Nothing is better
known however, than that ater a Ger
tain length OF time money grows restiye
after lying in banks and trust c,mpanies
al a low rate Of interest o. 4 many
cases at no interest at all. It win under
such circumstances soon begin TO force
itsetlf into investment channeIs-thatis. if
thes general financial position is held to
be sound.