The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1911-03-12

ing the decision of the interstate COM
merce commission against the rail-
roads came the call of President Taft
for the special session of congress
which will not only pass the recip-
rocity bill, but take up the question
OF tariff revision. Then came the
Mexican difficulty and the reduction
of New York CentraIs dividend, &C
companied by rumors that dividend
reductions by other roads may follow.
Railroad managers freely expressed
their disappointment at the rate deci-
sion, hence retrenchment is now a
feature of the day among most of the
great transportation companies. A
still further disappointing feature was
the continued increase of an already
excessive copper supply as shown by
the official monthly statements.
1t must be admitted that the mar
ket has withstood such adverse inf1u-
ences with surprising hrmness. These
successive shocks affected values but
slightly and any declines that oc-
CURED were quickly succeeded by al
most equal recoveries. While there
has been lack of activity, there has
on the other hand been a steadily
growing undertone of confidence, eX-
planned partly by the fact that weak
spots have been thoroughly eliminat-
ed and that there is no weak specula-
tive element in the market. The most
important factor, however in the sup
port of values is the abundance of
mr. OF oh
now Is for easy money until the crop
movements begin with the next har-
vest. Some temporary hardening of
rates may be expected incidental to
the April settlements, but this will
probably be a less important matter
than usual. Even at the west where
the financial strain has recently been
greatest, much improvement in the
bank position is reported. Deposits
are rising, and interior bankers ap-
pear confident of escaping any seri-
Gus consequences of recent excessive
land speculation. Money is also very
easy abroad, the comfortable position
of the London market being empha-
sized by further reduction in the
bank rate. In fact the ease of money
is world wide and must be attributed
partly to lessened commercial and in
dustrial activities, but largely also to
continued expansion of the worlds
gold supply. The latter has been 60
ing on for several years, and the de-
probation in this precious metal must
inevitably have an infiationary effect
upon all values, securities and COM
modities alike. 1t is by no means the
only factor affecting values, supply
and demand exerting a much more di-
rect and at times greater influence
than gold. The depreciation of the
latter, however. is force which
works slowly and silently, and it must
be conceded has been very influential
in preventing more radical decline
in prices than has yet occurred.
There is another consideration in
this plethora of cheap money which
should not be overlooked. and that is
it's powerful restorative effects. There
is no greater stimulant to enterprise
than an abundance of cheap capital
such as we now possess. Such con-
ditions always follow reaction and pre-
cede recovery. Once confidence is re-
stored, we may look forward with alb
solute certainty to renewed activity in
business. This country has now been
going through a period of nearly
twelve months rest and reimbursement.
Liquidation has thoroughly eliminat-
| ed all weak spots and there has been
very substantial decline in values
of both securities and commodities,
the latter as we have already shown
dropping from a commodity index fig
ure of 923 to s.O7 during the thirteen
months ending January, 1911. This
is a shrinkage of over II per cent,
which would have been much greater
had it not been for speculation in rub
Der, copper and cotton, which tended
to hold these commodities at an arti-
fetal level
An unusual feature is the large
amount of American money now be-
| ing loaned in Europe, These funds
were raised by recent foreign sub
scriptions to our bond and note is
sues. Not being Immediately required
here they have been loaned out to
better advantage in London. Hence
the failure of finance bills to material
! ize in this market when most expect
ed; hence also the rumor of gold i'm
ports later on.
General business continues quiet
and smaller in volume than year
ago. There is however a perceptibly
better undertone. Some hesitation is
caused by prospects of an attempt to
revise the tariff at the special session
intended for the reciprocity bill That
session should confne it's attention
strictly to the object for which it is
called, the passing of the Canadian
reciprocity bill, and any general stir
ring up of tariff agitation is to be thor
| oughly deprecated. Political condi-
| tons however are unfavorable to any
real or radical changes at least until
after another presidential election. 1t
is understood that the wooden and cot
ton schedules will be attacked and
possibly steel during the special ses-
sion, but it is doubtful if any very i'm
portant changes will be effected.
There is therefore no reason for un-
due anxiety on account Of tariff
changes. The same amount of food