Telegram-herald., 1891-09-01

clEwe LETTER.
rhs Dosn II the stock Market Prevss
70 - Substantial
New York. August 81, 1891.
TIE boom" IN the stock market
has now had four weeks of trial. The
movement has steadily gained IN
strength and breadth; the bears
have retired from opposition TO it and
maAy Of them have gons over to the
other sde; 1T has commanded the con-
fidence Of London. which from being q
free seller has become an active buyer;
IL has extended from the share market
10 the long dormant bond market;
the volume of business has risen TO
three-fold what II had previously been;
the other speculative cites have caught
the Injection from New York; an out
side" interest has entered the market
large enough to show there is no lack
OF either means or disposition among
the public To speculate or invest when
they are satisfied with the situation,
and prices have considerably advanced,
while the advance has not been checked
by realizings which have been made by
large holders, but still continues.
These facts are sufficient evidence
that, at least, the boom" Is backed
by large measure of confidence; that
IL Is more than a spurt engineered by
a few large and needy holders of
stocks as AT first suspected; and that
there As a large body OF influential
opinion in Wall-st. and out TO the
effect that the present situation OF
the country favors an era of national
prosperity and consequently better
prices for investments. Judging from
present symptoms there Is a reason
bic probability OF the boom being sup
ported and of an active and rising
market being maintained through the
fail season. Perhaps the only danger
lies in the usual tendency OF specula-
tive movements 70 rush from one ex-
treme to another and there by quickly
exhaust themselves. The spectacle of
such an extraordinary harvest as the
present one is naturally calculated to
arouse speculative enthusiasm
which may carry prices up at rail-
road pace to an elevation far above
what the occasion really warrants.
Such movements are neither healthy
nor, In the long run, really profitable.
They end in explosion and reaction
and entail heavy losses upon the over
sanguine class to whom the override
ing Is mainly due. The true course,
under the now existing conditions, Is
to follow the improvements in the situ-
alton as they rise rather than to
take them for granted in anticipation.
Much Of the financial force behind the
present speculation centers In the
hands of some half-dozen men OF great
wealth. whose policy Is to give encour-
agement and '.taffy" to the mass OF
smaller sanguine operators and then
sell out upon their dupes. A prudent
operator will regularly take his profits
and not use them as margin for in
creased purchases SO as to find him.
self finally among o mass of weak
holders who are unable to sustain the
market against strong men who want
to break prices.
The money market affords. on the
reserves OF the banks have at last be-
gun to decline freely under the drain
of money 10 the interior, and large
stS lnt bIt ~ u, lSs ob OOAfP0 cu WIZ Ofc
or two years ago, yet 1t Is necessary
Cor the banks to depend upon being
literally reinforced with cash from
some outside source. Some amount
may be expected after September 1
from the redemption of U. 8. four and
one-hah per cents-about twenty-one
millions OF " hich remain to be- ext nd d
or redeemed; but what sum will be
redeemed the event only can show.
The main dependence OF the banks
must be upon the return OF gold from
Europe which scems insvitabl, the only
question being that OF amount. Apart
from the effects og the prospective ex-
traordbnary exports OF wheat, it de-
serves notice that the national exports
are showing a large increase-those
sor July being $S S.2OO,O 900 above the
same month OF 1S9O,-while the July
imports fall $11 200, 900 below those
OF last year. The securities movement
with London. has, within the last few
DAYS, changed from one OF return to
that of export; and the rates for ster-
ling exchange show a weakening ten
dency in sympathy. 1t may be few
weeks before specie imports set in:
but the prospective movement Is near
enough to prevent, in conjunction with
the treasury payments for redeemed
four and one-halfs, any important
stringency in the local loan market.
HENRY CLEWS.