The Calumet news. [volume] (Calumet, Mich.) 1907-1938, 1913-11-24
THE GENERAL MARKET.
No lndueement to Buy, Except Purely
For Investment.


For Investment.
II is quite evident that the market
! has reached a state of equilibrium
where the apparent unfavorable factors
have been discounted. but also where
/ there is no inducement to oIy, except
purely for investment. II will take a
! development Of unusual importance TO
shake the market out OF its present
! lethargy An allowance of higher
| freight rates would serve such a pur-
pose on the upward side, while actual
| hostlities against Mexico would pos
sibly bring about further liquidation
though this is not at all CcUlGiu II IS.
however, unlikely that either Of these
will occur in the next few months. We
must look To the gradual working out
of economic forces for an influence To
arouse the market from rs present
dulncss.
We should expect that this neccs-
sary force would be found in the
cheapenng of money The strain on
banking resources, as has been fire.
quenty pointed out. has been world
wide and of unusual severity This
strain began 10 relax with the ending
of the Balkan War and for several
months money has been undoubtedly
accommodating This is clearly shown
by the reports Of banking institutions
everywhere The Bank of England
proportion of reserve is the largest at
this time In many years; the state
mnt Of our own national banks inst
published shows, as compared with
August 9th, an increase i'm loans of but
>75,o0oo0o as against an increase in
deposits of nearly 100000, 900.
With the further recession i'm bust
ness which is becoming more pro-
nounced every day there is every prob
ability that money will become posi-
lively easier after the first Of the year.
1t is really fortunate that this is so. as
without easy money it is difficult to see
how the railroads could have financed
themselves; with more than half bill
lion OF notes coming due within the
next twelve months the situation
would have been extremely critical had
monetary conditions remained as they
were six months ago.
II it bc assumed then that money
viii become easier after the first OF
The year. and We think it reasonably
may, an interesting condition will
arise. With money at, say, per cent.
and standard securities selling To net 8
per cent but one of two outcomes is
al
tits or business reaction will develop
into business depression and there will
be a general cutting Of dividends.
That there is possibility of the lat
ter there is no use denying a refusal
90 increase railroad rates. an indis-
crIminatc attack on business by the
administration, together with any de-
Nelopmcnt that would again tie up
money abroad, might very possibly
produce such situation. The point
however, ON which the prophets of evil
lay the most stress is that disaster
must follow the lowering Of the tariff
as il did when it was previously re-
duced. Without going into detail
We are satisfied that conditions are
essentially different now from what
they were in the early ninetics Brief
IF. the lowering of the tariff at that
time followed a. period of expansion
aud imitation; these elements have
been entirely lacking in this case. The
tendency has been toward construc-
ton rather than expansion. Mean
time, ia" country has grown cnor-
mously and the minimum Of business
that must be transacted is much
greater now than then. There is rarely
any great depression that is not pre-
coded by great expansion and we
doubt therefore, if there viii be any
in this instance.
In this case the other alternative
viii become operative and money will
seek profitable investment I'm sccuri-
ties. This should produce "A fairly gen
orous upward movement. BY this we
are not predicting any boom A great
uplift in business and securities, what
,yo call good times" can come only
when the business interests Of the
country are satisfied that the govern
mcnt viii not assail what they con-
slider their rights.
50 long as the larger interests cling
to their present attitude OF aloofness.
anything In the nature Of boom Is
useless to expect, nor need ii be look
ed for until the property interests are
satisfied that this administration can
not destroy values; consequently. any
large advance in the near future Is
most improbable, but wc think II rea-
tial Improvement after the first of the
year, based upon more favorable mon
etary conditions.-l!ayden. Stone &
90.