The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1917-02-22
NO FINANCIAL CRASH
FOLLOW HOsT|L|T|ES
REVIEW OF CONDITIONS AT Be
GINNING OF THE EURO
PEAN WAR.

In the weekly review of the general
market Hayden, Stone & Co. point out
the inherent strength of our nation
and the great change that has taken
place in the past three years The let
ter says:
THE present critical situation, with
the imminent threat of war for this
country, at once suggests COMPARE
son with conditions immediately pre-
ceding the outbreak of the war In
Europe. Such comparison is not
merely of academic interest, but should
afford the surest gauge of present
conditions. Let us then recall, briefly,
the situation as 1t existed two and one
half years ago Business, 1t will be re-
membered, had, with the momentary
exception of 1912, been tagging for five
years previous and was then at rather
a low ebb. Six months trial of the
new tariff had not been reassuring in
its effect on American industry; the
country-as was its custom-oWed
tremendous sums to Europe. On this
situation, almost without warning,
burst the European conflict. This eff
feet was indeed stunning The first
result was the entire dislocation of the
credit structure; naturally the first
thought that came was realization or
our indebtedness and the belief that
we would be called on to pay this and
to take back, in short order. the tre-
mendous foreign holdings of American
securities The present generation had
had no experience of the inflationary
effect of war demand, let alone an APP
probation of the fact that the United
States must shortly become the uni
versal center of the worlds supply for
these demands. Fhe only thought in
peoples minds was to put their house
in order and liauidate as rapidly as
possible, their indebtedness and pre-
pare ourselves to take back, If it were
possible, the European holdings OF
American securities that were sure to
1be thrust upon them. How easily this
was accomplished 10 iioN " hi"''Oi Va
history.
How different the conditions that
exist today. We have, indeed, learned
much in the last two and one-half
years We have, it is true, learned OF
the horrors and wastage of war; nc
one in his senses can do otherwise
than to wish its speedy and perman
ent end, but from the standpoint OF
the security holder, with which sucf
a letter as this is concerned, we have
also come to regard il in a somewhat
different light.
War demand has come to be recog-
'nized as an inflator of prices. The
supplying of Europes needs has giver
us the two most remarkable business
years in our history from a nation
heavily in debt to others, we stand
today. as the creditor nation of the
world the demand for our goods, par
ticularly raw material, continues un-
abated.
ut 81 doubtful If there will be any
4
ditions, even in the event of our enter
ing the conflict. We would still re-
main the great source of supply fol
allied nations. To their demands in
deed, will be added those of our own
government. These will probably
largely materialize in the way of pre-
paration, whether we enter the war OIL
not. There is, it is true the possbil
ity to be considered of some degree OF
naturalization of our industries such
as has taken place abroad but 1t Is
doubtful if it will go to the same eX-
tent. Eventually, the cost of the wal
will be brought home and we would
economically, be the losers. but its
first effect would be one of initiation.
Coming down to a question of ac-
tual conditions, the factor that stands
out most prominently, and to which
we attach the greatest Importance, is
the radical improvement i'm the bank
ing and technical position. The very
drastic liquidation of the past two
months has finally reduced speculative
obligations to a very reasonable fig
ure; for the first time in many months
the banking situation is really on a
sound foundation.
Likewise 1t is equally true that
prices have been Debated and excuses
eliminated to a point where 1t is now
possible to say, that at today's level
many, perhaps the majority, Of stand
ard shares are selling for less than
the average previous value plus &C
cumulated and undistributed profits.
"An actual declaration Of war would
naturally produce a temporary shock
and until this is decided, one way OF
the other, the market must be expected
to continue unsettled and unsatisfact-
DRY.
The points we would make are
first, that the experience of the last
two years has taught us that, econom-
ically we would have, for the present
at least, no great calamity to fear In
the event of hostilities; second, that
liquidation has put the market in q
position, and prices at level. where
we can await, with equanimty, any
possible outcome Of the present deli