The morning news., 1892-03-14
BANKRg CLEws, VIEWS.
The Financial Outlook as Seen From
Wall Street


NEW YORK, March 12.-Ths stock market
has been in an unsettled and feverish con-
dition during the week. chiefly owing 20 de-
velopments IN st. Paul and New England.
There ars conditions strongly favoring an
advance In values, and these have been re-
inforced through the concentration Of stocks
by heavy capitalists who are actively en-
listed on the bull side At the same time
the bull campaign will have to DO conducted
against difficulties which did not exist few
weeks or months ago. 1t must not be over
looked that business results are falling rather
short OF expectations; that the south has re-
ceived severe shock from cheap cotton I;
that the iron trade is IN poor shape aud
lower prices are threatened; that wheat Is
much lower than q year ago In spite of
large foreign demand, and that the bad
state OF trade In Europe must, in a measure,
backs from which we cannot escape,
and they partly explain the disappoint-
ment often seen just now in mer-
camille circles II to these set
backs we add the disturbance Of
confidence by the present silver agitation,
1t Is easy 10 see that the onward march Of
the bulls, however promising it may seem,
Is likely 20 encounter opposition of more or
less effectiveness. Their chief strength has
ed largely both directly and indirectly from
good crops. The large earnings and high
credit OF the Vanderbilt properties also en-
aoled them to manipulate these in a most
astonishing manner; while the coal stocks
notwithstanding last weeks liquidation,
have been absorbed by strong parties who
are not likely to unload very freely, except
at higher than present values, or in case of
unfavorable Developments in the coal situa-
tlon. Values OF these several classes are
now higher than for some years past II
Europe would cease returning our stocks,
the bulls would be greatly relieved: but, IL
on the contrary, securities continue coming
westward while gold goes eastward, their
task may become much more difficult.
The outflow of gold to Europe contrib
utes, with other Influences, to check the
upward tendency in the prices of securities.
With the almost unprecedented excess of
exports over imports during the last few
months, preceded by an effiux of gold so
extraordinary that it has been taken for
granted much of 1t would yet flow back, it
has been assumed without question that the
current would turn again in this direction
at an early day. The result. however, dis
appoints all these calculations; and. al
though no one fears an extent of drain that
would produce any real stringency of
money at this center, yet in view of the po~
sltlon In which silver legislation has placed
US or may yet place us, it suggests some
serious thoughts TO see gold leaving the
country so continuously, and in wavs which
1t Is almost as difficult to explain as il is to
prevent. 10 may be we'll, however, to keep
in view certain points as helping, in some
measure, to explain this anomalous move
ment. Q) This is the period Of the year at
which we usually export gold; and although
the trade balance is now so largely in our
favor that We might expect this season to
prove en- exception to that rule, still there
are conceivable and not highly improbable
conditions which might prevent such an ex-
ception occurring. ~ Among those oon-
celvable conditions may be mentioned a
change in our investment relations with
Europe. The Bering affair has, no doubt
contributed TO produce such a change
The exigencies of the debtor GLASS
In England and on the continent
have compelled realizing on investments
and on commercial reserves; and American
Investments have no doubt been among the
first to be sold, because they have advanced
In price. This process extended steadily
over many months, has probably sent home
much larger amount OF our foreign-held
stocks and bonds than is generally sup
posed; and such a process would materially
account tor less OF last years export OF
gold being returned than has been ex-
pected. Again, 1t Is more than conceivable
that Europe. under the financial condi-
tlons that have prevailed there, may have
preferred to keep it's accounts with the
United States closely balanced, instead of
allowing an unknown but very large
amount OF funds to remain for use with its
correspondents here. IL was principally
through drawing home these bal
ances that London, Paris aud Ber-
lin were able to get from us the
large amount of gold we shipped in 1891; ard,
should that policy be continued In force
still, it would materially affect our liability
to export specie now. 81 Our silver
policy NOT only 80 much of it as is
already exacted but also the worst phases
that are deemed possible in the future
has the double effect of influencing the re-
turn OF our securities from abroad, and of
preventing new investments In our railroad
and industrial enterprises; which works to
the disadvantage Of our foreign financial
balance AZ The fact that. under the new
silver law, the government has taken
900 ounces year of silver into its
vaults which would otherwise have been
exported. increases to that extent our
liability TO export gold. This factor. no
doubt constitutes an adverse element in
the foreign exchanges far more serious than
has been supposed; and 1t exhibits one of
the ways IN which free coinage would
tend to work out an exhaustion of our
stock OF gold. % Austria has
determined to bring about. at an early day,
a resumption of gold payments. For that
purpose she is expected to require to have
on hand about 800, 900. 600 Of gold. and a
foreign loan is to be shortly offered to raise
portion OF that amount. Ii is not TO be-
supposed that the great financial centers are
indifferent to such an important and deli
cate operation. nor that the national banks
OF England, France and Germany will fail
to employ all the arts known to banking to
insure that this new large reserve accumu-
lation is collected at the expense OF other
stocks OF gold than their own reserves. Il
is therefore more than probable that the
current unexpected outflow of gold Is due
to this operation among other causes.
HENRY CLEws,