The San Francisco call., 1913-12-06
F F|NANCE SITUATION
AND THE OUTLOOK
New York Banker Shows That
Changes Are Discounted
and Worst Is Over

Perhaps there has been no more
thorough vet concise stunning up Of
the financial situation as. it presents
= itself throughout the United States
TO-DAY than that contained in the finan-
cial letter of the New York banking
house OF A. A. Housman & Co for the
cgrrent week. In part the letter fol-
lows:
Changes Of great importance to finance are
taking place. We have, as one interesting ex-
pertinent, the adjustment of general business te
aaaowef range or tariff duties. Legislation 10
refogn banking and currency is at an adj
vanesd stage. On the evidence now being
submitted by the railroads the interstate COM
meree cimmission win decide whether or NOT
railroad rates ought TO be advanced, and the
decision VIII be extremely important. for II
once the precedent OF advancing rates by gov
ernueht authority is established it will mean
That. railroad capital for all time viii be ini-
mHne from the vicissitudes Of business.
q IN coptrsst with a situation so full Of in.
tersstipg possibilities. for better or wrOse,
speculation in Wall street is moribund. Why
IS sthat? IN so far as the possibilities OF
change are Cnfavorable, they have been dis
counted. That explains. the absence Of hqui-
dation we do not know Of anybody who has
any more stocks 10 sell on distrust of the
suture Certainly. brokers have reason TO
know that their clients have not got stocks on
margin. 1t is impossible to induce them to
bgys for speculation. Bankers may have been
scogmulatiug stocks but not in very great
quantities.
But a moribund speculation. though 1t may
mean that all the unfaYorahle osslblIltles
have been discounted, must mean also that no
large buyers are Inclined 10 discount the favor
able possibilities II we were asked 70 account
for that, we should merely say that our ex-
perience in Wall street would not lead US to
expect spectators TO turn hullish at the bot
tom and begin 10 imagine what might happen
for the better. They wait until considerable
rise in prices has forced their attention that
way. and the rise begins partly ia the aeenmu-
lation Of stocks quietly BY very few saga
cious fnanciers and partly in consequence sof
the little Investors uninterrupted absorption.
If one viii try to see II, there Is nothing
mach left that could 20 any worse, and there
are many things that could happen for the bet
ter. When read in the papers that the
steel mills are running az so to GO per cent of
capacity and that Mr.. Schwab predicts great
depression, there is nothing much worse TO hap
pen In that direction, because the steel mills
of this country can not for long continue to
run at only so OF 60 per cent of capacity The
countrys minimum requirements are too large
We shall get currency bill which, though
il may displease some bankers, Will please
s. others, and will be found better IN practice
= than in theory. One thing II Is bound to pro
F&1e for. namely, a wider. and more elastic
utilization of the credit resources OF the coun-
try. otherwise, a degree of imitation As fOI
the~railrpads they probably VIII be allowed "a
raise their rates, and. IL they are not, then
rhey VIII be able to practice some very whole.
some economy. especially IN the purchase Of
capital, with which they have been too extraY'