The morning news. [volume] (Savannah, Ga.) 1887-1900, 1891-10-05
Ban KER CLEWs' VIEWS
On the Financial Outlook as VieWeC
From Wall Street.

On the Financial Outlook as Viewed
From Wall Street.
NEW YORK, Oct. 3.--The speculative sit
uation shows more uncertainty than two
weeks ago. Two causes are responsible for
this; first, the rest and reaction which were
necessary after a rise of s@2O points within
few short weeks; and, next, tho develop
ments concerning the Missouri Pacific and
UBion Pacific, which have brought down a
storm OF indignation upon the heads of the
directors. All this abuse was no doubt greatly
intensified by the fact that public sentl-
ment was largely in favor of further
rise In values; and the check impaired by
the break in Missouri Pacific caused more
irritation than would have been the case
had the same event happened in ordinary
times. Mucn of this criticism was
misplaced, because Mr.. Gould has certain
ly taken much less active part in specu-
lative operations than the ''street" has
supposed. His condition of health, as
shown by recent apparent authentic
reports, absolutely precludes that sort of
vigorous activity. Personalities aside,
however, passing Missouri Pacific dividend
at a time when nearly all other railroads
are steadily making larger profits, only
emphasizes the utter folly of paying divi-
| dends that are unearned. This road had
failed to earn its full dividend for over a
year, but paid them out of borrowed funds:
presumably OF course for the purpose of i'm
proving the market for the stock among
those least informed, but which eventually
frightened such holders out by suddenly ex-
posing the secret when least expected. The
method of paying dividends not earned, if
not illegitimate before the law, is certainly
most reprehensibe from moral
point OF view; besides simply creating
control, which eventually acts most injurI-
ously upon the management ITSELF Never
theless, these tactics are not an unmixed
evil They not only have brought out in
strong contrast the differences ia such cor
porate management, as reflected in the COM
parati7e fluctuations of other stocks, but
they have also given the market the test it
needed in checking the unhealthy symptoms
of bull fever, which were only too plainly
developing. The pace bad become too
rapid, aud only promised exhaustion and
collapse before the race was run. AS result
of the present reaction, inexperienced
operators, intoxicated with success, have
had time to sober-up. The less venture
some buyers, always the large majority,
will secure an opportunity to participate in
the rise to come; while the leaders of
speculation will secure time to concentrate
forces and gain new power from the in
creased following which a moderate decline
will attract. Recognition of these facts
has already temporarily divided the bull
forces; 30 that, inte teltionally or otherwise,
recent events will in the end strengthen the
bull movement.
The solid facts are more in favor of i'm
provement than ever. The harvest has now
passed from the range Of possibilities into a
certainty. Plenty aud profit are already in
the grasp Of the farmer. Debts will be paid,
mortgages wiped out. and new enterprises
started on a scale hitherto unknown; all OF
which means expansion Of business ard in
creased traffic for railroads Nor will the
effect be restricted to the United States In
a measure the impetus started here will
counteraot the blight OF short crops in Eu-
rope. The brunt of that calamity must, Of
course. be borne there; and yet the rise in
American securities has already revived
dropping spirits on the foreign bourses and
helped restore tho confidence destroyed by
Argentine and other speculations. More
over, American pro -perity will enable
larger purchases Of foreign manufactures,
in spite of our higher tariff, fear of which
has been adding TO the depression abroad.
The war cloud which has been so long
threatened still remains. and seems darker
than ever. At the same time, hostilitIes are
not likely to begin in the winter; Russia
will not have completed her new armament
for two years to come, and the relations be-
tween the various powers remain too indeh-
mite to calculate upon with certainty. Ul-
timately, war appears inevitable. At first
it may injure American securities, because
they will be the best on which to realize;
but for just the same reason they will finally
be the best to hold; therefore, no serious or
lasting depreciation should follow our
stocks in event of European struggle.
Gold is coming this way with unexpected
freedom. This tends to lessen the possiblli-
ties of very tight money, which has been a
question of doubt to bulls of the prudent
sort. The other view of this gold move-
ment is that it causes firmer money abroad,
where stocks have been carried on Ameri-
can account, and discourages speculation;
TO that extent depriving this market of inns
portant foreign suppo {. Still, the imme-
diate course OF the market, however, seems
now more promising again on this side for
the bull side as a reaction from the recsnt de-
preston. For the next few days we look
for an active market, with good opportuni-
ties for traders. HENRY CLEws.