The morning news. [volume] (Savannah, Ga.) 1887-1900, 1892-01-18
BANKER CLEWs, vIEWe.
The Financial Outlook as Seen Fror
Wall street

Wall Street
NEW YORK. Jan. 16.-The past week In
Wall street may be regarded as a sort Of
test period. 1t has scored large advance
in prices, and operators have sold quite
heavily to realize profits. During the pre-
vious week also there has been considerable
realizing, and the probability is that, dur
iug the two weeks. an important proportion
Of the stocks held by the influential pro-
motors of the boom passed into new hands
The way 10 w hich the market has acted may
be regarded as a fair indication
Of the temper and strength of the
situation, and the result Of this test cannot
be construed unfaVorably. If the principal
sellers have been the class Of large holders.
and if 80 their sales there has been added
large short" transactions by the room
'Dears"-Which appears to have been the
fact II seems fair inference that there Is
an increasing important outside" element
in the market; and that conclusion is con-
tirTned by the fact that, on the whole,
prices have been firm under these liberal
reallzetiOns. The market thus seems to
have entered upon a phase in which it is
less dependent than previously, upon large
manipulators, who are anxious to realize,
aud more dependent upon a sanguine class
OF miscellaneous operators, who have
thought stocks worth buying at current
PAAeIoI RA4a ul5pOo6Q 1OlQ
them Tor future use. The course of trans
actions has therefore answered the question
whether the rising movement is entirely
due TO the manipulation of capitalist holders
who after selling out would leave the
market broken aud forsaken: and 1t is clear
that the public ct large are becoming an
influential element on the exchange. If
this conclusion be warranted by the facts,
1t ia an important one; because it implies
that the current speculative movement is a
normal one, In the sense that it rests upon
the public estimate Of the value of securi-
ties, and that therefore it is not likely to
suddenly collapse, with the result of a re-
lapse in prices to their former lower level
This means broader and more enduring
market; but one subject to wider oscillations
In prices, owing to the less sober temper of
the class who are entering the arena.
80 far, the present condition of the
market may be considered hopeful one
What are the probabilities as to its future
course. In answering that question we
shall aim to indicate what the tendency is
rather than the extent to which it may be
expected to run. Something must depend
upon the disposition of the commits
sion houses who can and do materially
influence the volume OF their customers
operations. For a long period, the business
OF these houses has ranged much below
its average amount; and it is, therefore
to be expected that they will encourage
transactions no to the limits of prudence.
rather than discourage them. They are the
more likely to pursue that course because
the conditions and prospects of the
money market insure their ability to borrow
upon average collaterals to any extent they
may need. Another condition turns upon
the ability of outsiders TO provide the neces-
sary marRlns,-the most essential factor Of
ali. The spirit and results Of the trade of
-
ton that there is much surplus earnings
brought over from last year available for
this purpose; and there is no doubt some
truth in this; but it is necessary to keep in
mind the very rapid growth of business in
this country; so that although last years
rate Of profit may have been lower than the
average, yet it is quite possible that the
actual sum may even exceed that Of
past periods when the transactions at
the stock exchange largely exceeded their
now current volume. So far as the expe-
rience of the past two weeks of the new
year goes, it does not suggest any lack Of
means on the part Of outside operators; and
we incline to think that, If a strong specu-
lative feeling should arise, no inability of
that kind will check it. So far as the in
trinsic merits of stocks may affect the fut-
ure, there is but one possible inference. The
| crops have already settled that question.
Tho largely increased earnings and
the improving dividends of the
last three months are but the beginning
of year OF railroad traffic surprising all
precedent. The augmented business OF
the roads Is an indication of what may be
expected in the various industries, and
especially those most dependent upon agri-
| culture, so that as the year progresses the
the means available for investment and
speculation will steadily increase The
liquidation of farmers loans which will
increase as the season advances will release
large amounts of capital; much of which
must find its way to Wall street. either for
permanent investment or for transient
| speculation.
1t may be said that already prices of
stocks have advanced sufficiently to dis
count all these favorable features. There
| Is truth in this view, and 1t would be pru-
| dent for those whose accounts show profits
| TO realize on them and wait for a reaction.
| But, at the same time, it may properly be
kept In mind that, in periods Of speculative
activity, prices are not apt to be adjusted,
! even approximately, to the intrinsic value
OF the properties. The speculative spirit is
the most impulsive and uncomfortable ele-
ment that influences prices and, when
! fairly aroused, it does not stop at the line of
| intrinsic value, but is guided by the
limit to which its own face can
| carry quotations. Experience shows that.
when once the outside public enters the
market in force, the line of real value is
passed; and from present indications and
the nature Of the general situation, it seems
not improbable that the present campaign
may at latter stage develop into that ex-
! citing phase. That, however, is not the
present state Of the market. For the time
! being, operators have some regard for the
intrinsic value of stocks, and there is limit
of prices at which they are willing to sell
and, therefore, it, is prudent!to be satisfied
with moderate profits and take into account
the possibility of reactions.