Evening star. [volume] (Washington, D.C.) 1854-1972, 1893-05-06
ReNieM of the Market.

Henry Clews' weekly Financial Review"
issued today. says:
At last the accumulated elements of distrust
have eliminated in a crisis on the stock ex-
change. 1t could hardly have been otherwise
The steady drain of gold from the treasury and
| the banks, extending persistentlv over the last
Tour months, was, apart from other adverse in
nnences, sufficient to strain severely the ability
OF speculative holders of stocks to carry their
loads. That strain has been borne with Compare
lively little yielding, through a reduction of
some S45.00G 600 in the loans Of the associated
banks which has been an evidence of the in
trlnsic strength of the market; but. in the alb
| sence OF any signs of immediate relief of the
pressure, the banks and the holders of stocks
have alike yielded to their fears. the former
calling in loans ard the latter unloading their
holdings, until virtual panic has seized the
market.
As might have been expected, the .'indus-
trials have proved to be the chief point of frac-
ture. Those issues have constituted large pro-
portion OF the speculative transactions on the
exchange during recent years, and have been
inflated BY manipulation immeasurattly beyond
any conservative estimate of their intrinsic value
Owing to the unsound basis of their orgauiza-
ton they have found little lodgment among
investors, and have been principally an instru-
ment of speculation as between the original
holders and outside spectators. Under these
circumstances they have always been treated az
unsatisfactory market collateral, and conse-
quently the recent calling in of loans
has very sharply Disseminated against them.
i he event rs nothing more than has been ex-
pected l.. the event of such conditions as have
low happened. and among conservative men
the event is viewed rather as a drastic form Of
relief than as a real disaster. The break elimi-
mates a lonG-felt element of danger from the
market and gives 20 securities of higher intrinsic
merit fair chance for realizing their true yaiae.
Outside the "industrials' the market has stood
up remark ably well The entire list has been
alphabetically affected. but there is good rea-
son 10 hope those arrangements will prove
only temporary. The railroads are conceded
to be liz excellent condition and the market is
by no means over-sur piled with that class of
stocks. In fact, the ordinary run of securities
are regarded as IN a sound and satisfactory con-
dition, and, at The late current range OF prices
nave been readily accepted as coiilterai.
The break put, the whole ma. ket IN a sounder
ard safer condition. The general financial SIT
uatlon has not been injurlously aggravated by
the crisis: on the contrary. il has rather been
improved, through the elimination of an ele-
ment of disturbance and distrust in the loan
market
The demand on the treasury for gold for ex-
7 has abated. and at the moment shows no
m aed tendency toward revival. and the
gold reserve Ia consequently better maintained
than has been expected. Still, however. the
NAPoiNo vi ffo1uSS uUCd ptkuW
the requirements of the foreign ex-
changes, and, so long as that con-
tinues, there can be no assurance of
escaping further shipments of gold. 1t would
seem reasonable to expect that the destructive
effects of the drouth in Great Britain. France
and some other parts of Europe will cause an
advance in breadstuffs and a consequent revival
In our exports. which is the thing above all
else needed to adjust the abnormal condition of
our foreign trade balance.
What has befallen the .'industrials" and the
smaller declines that have occurred on her
stocks in sympathy. must. of course, leave the
market in disabled condition. and operations
will naturally center chiefly upon the better
class OF stocks, which. at present prices. afford
very tempting Investments. At the same
time it is very important that the
real significance of the crisis be
not estimated. The break has
come mainly from sudden excitemeuts and I'M
rejecting fears. caused by the general collapse
| of the speculative "induStrials." The crisis
has comparatively little to do with the general
| condition of business. which is sound. and. up
| to this time, has been unusually prosper
| GUS. There has been no undue imitation of
enterprise in any direction. but rather an
| exceptional exemption from II. Credits
| have been kept in a healthy condition;
| there is serious European financial derange-
| ment, and, in brief there is a comparative free
| dom from most of the abnormal conditions
| that usually Law the basis for panic. Being thus
limited as to its causes, the crisis will be CORE
spondinglv helped in the stage of recovery from
its effects. Having made securities cheap. one
| of its results will be to draw ont a stream of or
| ders for inve- tment. both at home and abroad:
| and il would not be surprising should il be
| found o result in outflow os securities to
| Europe that will materially contribute toward
rectifying the strained condition of our foreign
exchanges. 1t will be found to open up many
| forms of relief to the transient monetary de-
| engagements ;hat have arisen from other causes
There now many securities that NAV be
bought for prices that will Weld within q few
| weeks more than usual profits.