The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1891-01-06
THE WEEKIN WAL STREET.

NEW YORK, Jan. 5.-Henry Clews &
Co. IS. weekly financial circular says:
Although the past week business has
been interrupted by the holidays, it has
shown distinct improvement in activity
and confidence on the stock exchange II
has been, in fact, the only week since the
middle Of October that has shown any
thing like the old-time feeling.
The causes Of this recovery have not
been trivial, nor are they likely TO prove
entirely transient The last bank state
ment showed an unexpected improvement
in the bank reserves; the surplus over legal
requirements being s., 100000, compared
with s., 100000 for the same week of last
year, s., 10000 in 1883 and S9,00000O in
1887: which shows a fully normal cOndi-
tion of this important factor in the fnan-
cial situation. These figures indicate that
at last, q reaction in the currency move
ment in favor of this city has fairly set in;
and judging from all precedents under
like circumstances, the refluX Is likely to
continue until we have at this center an
actual plethora Of money with consequent
low rates of interest. Another
cause Of the improvement is the import
ant fact that about Sl25 0O0, 900 of interest
and dividends is payable at the beginning
of January, An un8scertained but un-
GoUbtedly large portion of these payments
is always devoted to re-inveStment, which
EItdLEb ~ special OtIldilu lbT DolluS anu Jilc
better class of stocks at this season. Or
dinarily, this demand is forestalled by
speculative buying early in December; but
this year that buying has not been forth
coming; and ,rices have consequently had
no advance from this cause and being eX-
ceptinally low, there Is the more pTObabil-
ity of n rise during the first half of Janu-
ary. Another cause OF the better tone has
arisen from the oversold condition of the
Enf ba fr nf
bears" TO face the special demand from
investors that may be reasonably expected
during the next two weeks. There has
also been a feeling that the presenC extra
ordinarily low prices, coupled with the
easier condition of the money market,
may induce a certain class of investors to
devote a portion Of their January income
from securities to the purchase of stocks,
as a transient investment
This immediate recovery in the tone of
the market will probably prove TO be the
beginning of "a more important later move
ment. The future ease in money is likely
to be as decided as the past stringency has
been. Under circumstances such as have
recently occurred, the money market al
ways quickly reacts from the one extreme
TO the other Business becomes more or
less restricted throughout the country and
prices OF wide range of properties decline:
and as a less volume of circulation is
therefore needed, a surplus of money ac-
cumulates in the banks, which in their
desire TO keep their funds employed, have
% reduce their rate of interest When
such a state of the money market as this
arises and there exists at the same time
market valuation of stocks some thirty to
forty per cent below their normal value an
outburst of the speculative spirit becomes
inevitable. IL is an unfailing rule of eN-
qerience that, when securities have
touched the lowest possible point of de
preston, il is entirely safe to buy them for
a rise. the only condition necessary e.
such an advance being an abundance OF
lOanable funds, which, IN the present case.
s. certainly assured. At present, there are
these factors in favor Of recoveryi the
weak spots among dealers have been
eliminated from the market, which gives
confidence 30 lenders OF money:
and the class Of inflated stocks
have had the element OF water squeezed
out of them. Another very important
consideration in favor Of railroad stocks is
that the great southwestern systems,
either with or without the proposed com
bination of arrangements, may be de
pended upon TO improve upon their past
destructive cutting of rates; whilst the
granger states show a marked disposition
both in their legislatures and their rail
road commissions, TO relax the past
severity of their interference with the
management of the railroads; from all of
which IL is reasonable TO expect an i'm
provement in the net results Of railroading
from this time forward Under all the
circumstances. II zee nS reasonable to CON
clude that an average advance Of : TO 10
points upon the present prices of stocks
may be realized before any question can
bee reasonably raised as 90 their market
price exceeding their instrinSic value
The banks are meeting Literally the
demand for money from the south incident
to tins season. and hence the currency
movement with the interior shows a net
loss M New York, for the past week. Of
about 81 500 600. most of which has been
transferred through the sub-treasUry The
ordinary transactions between the sub
reaSurv and the banks excluding the
money transfers re ferred tol show a loss
10 the banks OF about S350.OOO "