The morning news., 1892-02-08
BANKER CLRWs, VIEWS.
The Financial Outlook uas Viewed
From Wall Street.

|
From Wall Street.
NEW YoRK, Feb. 6.-DurIng the past
week the course of business at the stock
exchange has been quiet, irregular and, on
the whole, toward lower prices. The mar
ket has, for the moment, fallen into the
hands Of the professional traders, among
whom, as usual, the ''bear" temper pre-
dominates. The outside public and the
| larger bull operators seem willing that mat
| terS should take this course for a while
They have realized handsome profits on
the January advance; and, in the absence
| of any very pronounced "bull" feeling at
the present stage, they deem it good tactics
TO Withhold their support and permit the
bears" to knocks several points off prices
| and then take in new lines for a fresh ad-
| vance. Under these circumstances the
bears" are allowed a fair chance at selling
down the market, and both sides may in
turn have an opportunity for profitable run
OF speculation; which, as the temper of the
market now stands, II perhaps the most
/ wholesome course affairs could take, al
though it may be attended with a tran.
slently unwelcomed quiet among the COM
| mission houses. - rsr
There is no sufficient reason for constru-
| ing this change of temper as meaning that
the speculative feeling has collapsed, or
that prices are destined to any important
reaction. 1t means simply that the spirit
| of speculation, at the moment, is conserva-
tive, and that the bull" leaders, appre-
ciating this, deem it wiser to encourage an
undulatiug advance, with it's ups and
downs, rather than to force prices in the 6i-
rection OF straight upward line. In the
meantime, there Is no surrender of the gen.
eral conviction that prices must ultimately
go higher and possibly much higher; but it
| is conceded that months may elapse before
that tendency eliminates; and, among
speculative leaders, 1t is preferred that the
| campaign should be so prolonged.
The extraordinary ease in the loan mar
ket can hardly possibly fail to produce an
active, If not excited, speculation. When
an extreme ease in money comes concur
rently with general depression in business.
| IL may fail to develop speculation; but
| when-as Is the case at present-it happens
| along with large crops and healthy state
OF affairs at large, it almost inevitably car.
| ries along with 1t a general rise in the value
of securities as well as Of other Investments.
| There are two especially potent monetary
| influences at present acting as lever on the
market. In the first place, the farmers are
devoting large amount Of the proceeds of
| their abundant crops to the liquidation of
their farm loans, which has the double
| effect of creating a fresh demand for in
vestments from the holders of liquidated
mortgages, and of causing large accumu-
1
centers. This movement is one of the main
causes OF the continued extraordinary in
tlux of money from the interior. In the
next place, the accumulation Of large float
ing balances at this and the other seaboard
cities is producing depression Of the rate
| OF interest on call loans, which is appalling
to the banks and to other financial institu-
tins; and that induces a demand for the
| dlvldend-pAylng stocks, which amounts to
! the withdrawal of an important amount of
Al shares from the market These with-
drawa!s have been, to some extent, offset
by the return of securities from
| Europe, but symptoms seem to
indicate that the rehux from
| London has about ceased-a probability
which is strengthened by the low rate of
| l@lA per cant. for call money on that
market Influences OF this character, how
ever. are not apt to create sudden or sensa-
tional advances in prices. They appeal
mainly TO careful financial managers. who
make their investments gradually as their
funds accumulate and avoid a show of buy
| ing; and, for this reason, these factors may
not be expected to produce their full effect
on prices until a later stage has been
reached. Sagacious operators have their
eye upon the ultimate outcome Of these
causes and therefore are immovahly
"bullish;" !" but during the interim, they are
willing to make short turns for moderate
profits.
| The bears" advance as their chief argu-
ment against an upward movement in
prices that, the world over. affairs are ia a
reactionary condition which. they say, is
attended with a commercial depression
| which Is incompatible With "bull" mar
ket for securities. There is a semblance of
truth in this, but nothing more The rea-
| soninR would be sound il the depression to
which it refers was the consequence of
! panic and its usual attendant widespread
bankruptcy. 1t is true that the Barring
| suspension and its surrounding circum-
stances were sharp shock to business in
all parts OF the world; but there was moth
| ing like the contraction of credit and the
losses from failures that usually attend
the great periodic panics. It was a
shock, but little more and its effect has
been principally to create conservatism, to
check really unsound enterprise, and to
| eliminate wild speculation at few diseased
| spots in South America, rather than produce
ageneral violent disorganization of trade
and finance. This amounts to much less se-
rious reaction than that which ordinarily
succeeds general panic. It's effects are
! not only less severe, but are also briefer in
| their duration. There exists in Europe q
| contraction of unsound business and specu-
lation, which is shown in the decrease of the
| commerce of Great Britain, and that of
| some the Continental nations; but there is
none of the excessive caution that denies
caplIal or credit for1merltorlous under
! takings; and when the rate of interest
falls to l@2 per cent. the holders of
morey are not likely to prefer
TO keep it idle rather than invest it in good
| securities or lend it upon safe collaterals
1t is therefore reasonable to infer that such
! general consequences as have followed the
crisis OF seventeen months ago may be ex-
! pected to yield early to recuperative influ-
ences, and the signs are not lacking that
| such recovery is already in steady DrO0rees
and will make itself plainly visible in the
| course OF the current year. Such recover
is especially to be expected in this country;
| for not only have we suffered less than
Europe from the Barring crisis but we have
also been enriched by the best harvest ex-
perienced in the history of the country.
The only dark spots in the home situation
are the depression of business and the back
wardness of payments at the south and the
| duilness Of trade on the Pacific coast; both
| CT which are mainly the consequences of
undue expansion of speculation or over-