The Valley Virginian. [volume] (Staunton, Va.) 1865-1895, 1891-01-08
The PROSPECTS for 1891.

The Prospects for 1891.
statement from an able financier,
Henry CIews, the well known and relia
bic banker and financier of New York
furnishes the following indication of the
feeling in financial circles, at the centre
of the business of the country, under
date Of New York, January 3, 1891. 1t
accords with the views we have ~hereto-
fore advanced in these columns, as re-
suit of careful study of the condi-
tions as presented in the business of the
country, the influences operating and
the increased wealth of the nation grow
ing out of the new sources of develop
ment in the South. This statement
from such a well known and high au-
thority as Mr.. Clews will be especially
gratifying to the people of Virginia and
the South generally. All we need here
is money to assist in opening our mines
and appropriating their products to the
higher forms of industries. With a
surplus of 1925, 100000 of January inter
terest, which will naturally seek invests
ment where it will be assured a liberal
return, the South may confidently look
for large proportion of it to locate with
it,and q fresh impulse be given to the in
dustrial activity which has just fairly
commenced in this section. Mr.. Clews
Although the past weeks business has been in
terrupted by the holidays it has shown a dis
on the stock exchange. 1t has been, in fact. the
only week since the middle of October that has
shown anything 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 statement showed an
unexpected Improvement in the bank reserves;
the surplus over legal requirements being $7,700,
GO, compared with $3 400 90 for the same week OF
last year. $500, COO In 1888 and 100000 in 1887;
which shows fully normal condition of this i'm
portant factor in the financial situation. These
figures indicate that, at last, reaction in the
currency movement in favor of this city has
fairly set in; and, Judging from all precedents
under like circumstances, the arefux is likely to
continue until we have at this centre an actual
plethora of money, with consequent low rates of
interest. Another cause of the improvement is
the important fact that about 1925 600 goo of in
of January. An unascertained but undoubtedly
large portion of these payments is always de-
voted to reinvestment, which creates special
demand for bonds and the better class of stocks
at this season. Ordinarily, this demand is fore
stalled by speculative buying early in Deem
Der; but this year that buying has not been
forthcoming and prices have consequently had
no advance from this cause and being excep-
tionally low, there is the more probability of
rise during the first half of January. Another
cause of the better tone has arisen from the over
sold condition of the market and the unwilling
ness of the ''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 present extraordinarily low
prices, coupled with the easier condition of the
money market, may induce certain class of in
vestors to devote a portion Of their January in
come from securities to the purchase of stocks
as transient investment.
This immediate recovery in the tone of tile
market will probably prove to be the beginning
of more important later Improvement. The
future ease in money is likely to be decided as
the past stringency has BEEN Under circum-
stances such as have recently occurred, the
money market always 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 less volume of circulation is therefore
needed, a surplus Of money accumulates in the
banks, which, in their desire to keep their funds
employed, have to reduce their rate of interest
When such state of the money II arket as this
arises and there exists at the same time mar
ket valuation of stocks some thirty or forty per
cent below their normal value, an outburst Of
the speculative spirit becomes inevitable. 1t is
an unfailing rule of experience that when secur-
of
depression, it is entirely safe to buy them for a
rise, the only condition necessary to such an ad-
vance being an abundance of loanable funds,
which, in the present case, is certainly assured.
At present, there are these factors in favor of
recovery; the weak spots among dealers have
been eliminated from the market which gives
confidence to the 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 without the proposed combination
of arrangements, may be depended upon to i'm
prove upon their past destructive cutting of
rates; whilst the Granger states show a marked
disposition, both i'll their legislatures and their
railroad commissions, to relax the past severity
OF their interference with the management OF
the railroads from all of which it is reasonable
to expect an improvement In the net results OF
railroading from this time forward. Under all
the circumstances it seems reasonable to con-
clude that an average advance of to 10 points
upon the present prices Of stocks may be realiZ
ed before any question can be reasonably raised
as to their market price exceeding their ntrin-
sic value.
The banks are meeting literally the demand
for money from the south incident to this sea-
son. and hence the currency movement with the
interior shows net loss at New York. for the
past week, of about $IS00,0OO, most Of which has
been transferred through the sub treasury. The
ordinary transactions between the sub treasury
and the banks Excluding the money transfers
referred to) show a loss to the banks OF about
$250,tW. HENRY CLEWs
John Williams, colored, lost his life at