The Gisborne Times PUBLISHED EVERY MORNING MONDAY, DECEMBER 14, 1908. FINANCIAL CONDITIONS IN AMERICA

Gisborne Times, Volume XXVI, Issue 2373, 14 December 1908, Page 4

The Gisborne Times PUBLISHED EVERY MORNING MONDAY, DECEMBER 14, 1908. FINANCIAL CONDITIONS IN AMERICA

One of t-lio most noticeable features, in connection with the recent improvement in the wool trade has been the fact that the classes of wool most suitable for the American market have been chiefly in demand and it is not too much to s'av that the revival of orders from the United States has been the salvation of the -market so far ,as the season has progressed at present. Under the circumstances, it; is very profitable to consider for amoment the underlying factors in that connection so that we may ascertain what are the probabilities of our American friends continuing in the market as buyers of our wool during the remainder of the season. The position obviously depends -upon the condition of the masses, for it was their impoverishment following -upon the dislocation of the money market which closed the American market to us last season. AYriting upon this subject just before the last mail left New York and prior to the Presidential election, an influential jonrnal summed up the facte as follows: It is commonly assumed that, with the uncertainties of the election out of the wav, the industrial and financial world wilU enter upon a- period of boom. There can be no doubt that the magnates of AYall street arc filled with this belief, for they have held the -market against unfavorable developments of various sorts, such as the disturbance in the Balkans and threatened exports of gold. Nor has ibis optimism had mere hope for its origin. There has boon a. distinct growth in general business, though the totals still leave much to he desi red. The railways report a- constant diminution in the number of idle cars, and current prices for United .States Steel Stocks indicate that the outlook is more cheerful than it has been for months. Nor is this all. The Bank of England’s latest return shows a reserve of 51 3-4 per cent —the greatest the bank has ever hold at this time of the year, with the single exception of 1904. It must also he borne in.mind that tliis handsome reserve has been built up with relatively low rates of interest, whereas cash wa's being accumulated through a forced liquidation of (loans in the autumn of 1907. Gold now flows into Throadnecdle street, in obedience to natural law; then it was only to he got by compelling the speculative public to soli across the- bargain-counter. It may be assumed that the big people have bought stocks, in the expectation that the outsiders will take them at higher figures when once polities shall have got back to the normal. The weekly statements- of the New York Associated Banks reve-al an expansion- of loans which supports this theory well enough. As a rule it is found that the probable, -and even the possible, is fully discounted by operators of this class. Somestocks are to-day almost as high, as they were before the panic cast its lengthening shadows. What will happen, then, if Mr Taft he elected, as the captains of industry think and desire? Leaving technical considerations aside, it is fairly certain that the dawn of political peace- will imply a distinct uplfit in general orade. In commerce, as in physics, the -10coil is equal to "the shock, and a- raceso virile as ours will inevitably seek to recoup itself for a prolonged season of lethargy. The crops have been abundant, -and, with the exception ot the South’s-great staple, are in strong demand at prices which mean fat profits for the -farmer. With wheat at ia dollar and corn at 60 cents per bushel, the West, is bound to have an immense purchasing power,, whioa, in its tu-rn, -means that the railways will be crowded with traffic.. Moreover, the hard times have driven tiio average American to economize, as lie never does -when money seems as easy to make as. to spend. _ Theie thus a huge hole to be filled, and tlie factories will have.to work to the lnaximum in the effort to- fill it. Not only so, but labor, finding more amnio employment, will buy on the normal scale. Taking the situation, as a wholo, wo may infer that, while uheio wiU be difficulties to surmount, there will! ho no recurrence of the-disasters

which have kept the country on tenterhooks throughout the recent past. ® The picture here outlined 1 is pleasant to look upon, for there is no doubt that anything in the nature of a business boom in the United States would result in a stimulation of the wool market, and at the present time there is nothing that can bo -more fervently desired from the point of view of a New -Zealander. The -pity of .it is that our American friends cannot' bo induced to open their ports to our frozen meat which the'masses of that country need almost as urgently as do those of Germany. The New Zealand statesman who can bring about the introduction of our mutton and lamb, to American -and German consumers' would aebiove a diplomatic triumph which would entitle him to rank as one of the public benefactors of the Dominion.