The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1894-01-08
FINANGIAL REVIEW.
Henry Clews's Weekly Letter on
the Business Situation.
FIVE CAUSES OF The CONTRAST
Between the Feeling on the stock x-
change and the Tone of Affairs Out
side-Industrials cannot Go Down.
Much OBSERVATION-DISCLOSURES Di-
vesrtcd to Railroad Propcrties-some
Comparative Figures.
,,eciol cor,esnondence Of he I~utelligencer.

:pecial Correspondence Of the Intc11iqencer.
New York, Jan. 6.-The new year
opens with a feeling on the stock ex-
change which is in welcome contrast to
the tone Of affairs outside. There is no
very marked buoyancy, nor any great
activityi in securities; but equally there
is an entire absence of pessiInism and
prostration that prevail universally in
the commercial markets. ltImay be
worth while to consider this difference;
for it is real and has caused which ought
to be generally understood.
~ There is undoubtedly IN excep-
sionally light supply OF securities on
the market. This is evident from the
large decline in the construction OF new
railroads during recent Years. For the
four years 1SS6-7-S-9. The average in
crease Of mileage was $3.50 per year.
For 1892 and 1898 the average increase
was 4,3O0, whilst last years new con-
struction is estimated at about 5000
miles. The construction of 1898 was but
a trifle in excess OF the average for the
five years of prostration following the
panic OF 1873. It is to be considered.
also that the construction OF the last
five years has consisted largely of ex-
tensions by existing corporations,
rather than of new road by new COM
panies,. and much of that was built
from the earnings OF the companies in
stead of from new issue of securities,
with a two-fold result-an increase OF
property owned, but without a CORE
spending increased OF obligations, though
with some resulting dioersion of income
from dividends. This has strengthened
the intrinsic condition OF many roads
and increased their earning capacity,
although it has tended to temporarily
keep down the rate of dividends.
(2.) The operation of this process, for
fully four years past, has had the effect
of reducing the supply OF new railroad
s%urities coming upon the market to an
exceptionally low minimum; much low
er than that of ordinary times, and be-
low what a conservative course of in
vestment was capable of absorbing.
One result of this drift appears in the
fact that probably, at no period for
years past, has the amour OF stocks
and bonds held for a market by rail
road promoters and capitalists been so
relatively low as it IS to-day. This
factor is always II that has an import
ant bearing upon the sustaining
strength of the market; for the knowl-
uNt = ~ / liSC bioShS III
securities awaiting an opportunity to
be shifted upon the public naturally
tends to keep buyers persistently timld
and encourages assault from the profess
eional clears - and, vice versa, opposite
conditions encourage confidence.
80 The foreign markets for our in
vestments afford no present reasons for
distrust in the home market. 1t is not
to be d lied that the general CONNER.
cial depression in England and on the
Continent is curtailing largely the in
come which might otherwise be seeking
investment in our stocks and bonds;
but it iseequally true that those causes
are not inducing any return homo OF
our securities. During the period be-
tween tho Barring failure and our great
silver crisis, very large amounts, proba-
bly, ranging in total market value be-
tween S~l25,OOO,O00 and $4,000 900,
were sent back upon us; but We took
them without Inconvenience, evidently
because of the light supplies on the
market above alluded to; n that re-
off the foreign markets all the stocks
and bonds they care to part with; so
that there is little probability of i'm
portant further supplies coming from
that source. If it be said that the i'm
mense amount of railroad property now
under receiverships is calculated to
shake foreign confidence the answer
from fast is that no securities are COM
ing back on that account It is, on the
other hand, q question deserving con-
sideration whether, with the growing
.~apprehensions OF a great European war
coming in the spring and the current
low rate OF earnings on industrial cap
ital, English, German and Dutch in
vestors may not show a preference for
our investments over those OF their re-
spective countries.
az Industrial securities. taken as a
whole, have reached a level of prices at
creased confdence.e The silver panic
and the prospective effects of the new
tariff have produced such an extra
ordinary collapse in prices, that it is
hardly conceivable how they can fall
much further. The following are the
comparative quotations for this group
OF stocks at the beginning of 1894 and
of 1894. respectively: