The Wichita daily eagle., 1894-01-02
CAPITAL is AFRAID
CLEWS LAYS THE BLAME ON
TARIFF UNCERTAINTIES.
Money is Unusually Plentiful at
Present bat the supply of Float
ing Stock is Short and Indus
tries Offer No Induce
ments to Investors.

NEW YORK, Jan. 1.-Henry Clews, IN
his weekly financial circular, says:
Upon the whole. the year closes with
better feeli Ig on the Stock exchange than
might have been expected under 50 many
unfavorable conditions. We are on the
eve of the disbursement Of some 1850, co.,
600 of interest and dividends, large por-
tion of which VIII be re-iuvested: and the
anticipation of this large demand from
that source has naturally the effect OF sus-
tanning the market Considering that
bonds are becoming scarce and high and
that the dividend-paying stocks are in
comparatively moderate supply, 1t would
naturally act favorably on the general
list.
lit is long period since the old year
has closed under such serious condit,ous
as now everywhere prevail. Every couu-
try in Europe has its troubles, worse than
our own; anG they are of a character so
RADICAL that it will require time TO heal
them. Iu this country the arrangements
are accute, but they are OF kiud more d.
recsly under our own control than are
those OF the European nations. La our
case. there had been no antecedent over
trudlng, nor excessive speculation, nor
general unsouuduess of credit. On the
contrary, 1898 opened with a generally
sound and iairly prosperous condition OF
business; and although The panic Was one
OF perhaps un.qualed severity. yet II was
due TO causes not Inherent TO business
proper but outside of business and con-
nected with "A great alarm about the con-
dition Of our currency system. The silver
panic, however, became the Cause OF
general proStratiOu of trade and credit,
from which recovery could not possibly
be immediate, even though the cause oi
the alarm bad been temedied. The period
OF recovery, moreover, Is further po>tpau
ed by Intervention of n sweeping revision
of the tariff. This latter circumstance
would, under the best of conditions, have
proved a very serious cause OF commercial!
disturbance bus, mingiiDg with the I'm
mediate effects Of a great panic, lis seri-
BUSINESS is doubled.
1T is gratif, ing, not to say surprising,
that in Such state of affairs and with iow
earnings of the railroads, there should be
SO much stsadiness in values at the fiuan-
cial centers. There is a reason why, un-
der the present condition of business,
bonds are in active demand and stocks
withstand the shock Of discouraging
events and the systematic attacks OF pro-
fessional bears. The cause Is not in the
mere abundance of money; for IL ha,
often enough proved that prices declined
under the lowest rates of interest. Nor IS
ii TO he found in an active outside specuia
tive demand tor stocks; for such opera
tiOns are now at minimum amount.
Nor IS it due to any effort of wealthy cor
porate interests to bolster up their prop
critics; for, as matter of fact, the market
has less of that kind OF support than
usual. The explanation Is to be mainly
found in two facts-that the fOatinS sup
ply of stocks is moderate, If not even un-
La rUrRf n
floating capital seeking employment IS
considerably larger than might be ex-
pected under the circumstances; and An
other, though minor reason, IS that several
hundred millions of stocks are thrown
into suspense and have therefore become
Inactive, through the companies being III
the hands of receivers with the effrct
of concentrating the market upon stocks
more favorably situated. The truth is
thar, for several years past, the wealth of
this country has been accum ulating at an
unprecedented rate, and the smount of
capital seeking permanent investment Is
therefore much larger than is generally
supposed. Panic CAUSES the possessors of
this wealth to temporarily discard busi-
ness enterprises and to prefer putting
their funds into some we'll known
and easily marketed security; and
they therefore enter Wall street when que
tations are exceptionally low and take Oft
an assortment OF stocks, which they may
either hold permanently or sell when
prices adyance-an entirely safe aud prot
liable operation. This sort OF thing Was
done largely during the low prices at the
height OF the panic, aud Is still in process;
ana that accounts not only for the present
relative steadiness or prices, but niso for
the undeniabIe lightness of the floating
supply of stocks. It must also be consid-
cred that while this withdrawal OF secur-
tiles into Investments is reducing the sup
ply, there is much less than the average
new supply coming on the market from
the construction of railroads. This Is
strikIngly demonstrated from the fact that,
for the last four years, the annual con-
struCtiou of new road has averaged only
4, $50 miles, while Tor the four next pre-
c-dlng years the average construction WAS
S, 30 miles. This fact has a double sig
ulficance. Ii not only proves relative
scarcity in new supplies of securities. but
it also shows that the railroads are less
than formerly exposed to competition
from new mileage, which has always been
the most uncomfortable cause OF low rates
OF freghts.
Nv e enter the new year with reasonable
grounds for hope that lis close will find
affairs IN a largely recovered condition.
There Is ample capital awaiting employ
meu:: but industry has no use tor 1t until
conditions are mace clearer By the enact
ment of the new tariff. That poiut being
reached, the utterly depleted stocks o.
every kind OF merchandise will fnd EN-
ploy ment enough idf our industries Ia
the mean lime, wages are declining IL
every trade, and to that extent prepsrs-
tions are being made for the cheaper con
ditions OF production that the new siSzs-
ton Will require"