The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1895-05-20

think that resting point has been reached,
az which the market should be tested and
observations prudently taken OF the coming
financial weather. And yet IL is more than
likely that. in spite OF themselves, these
same cautious observers will soon tnd them
There are unseen forces behind the mar
ket, which few understand and the force
OF which VIII still fewer appreciate. Those
forces started the movement when ii was
little expected: they have scarcely been
suspected by the most sanguine bulls;
that they have not yet exhausted their
energy. These influences began TO show
their effects three months ago, and were
uShered in by the operations or the loan
syndicate. They are not. however. TO be
attributed wholly, nor even principally TO
little more than prepare the way for the
working out of tendencies previously exist
ing, but which had been held IN restraint
by the deranged condition of the treasury
finances and the consequent misgivings
about the currency. Nor has this renarka-
BILE revival been so largely attributable as
many have supposed TO the abatement OF
doubts about our ability to ward on the
influence undoubtedly; and yet its effect has
been but secondary. The real causes lie
deeper. To find those causes We must 90
back TO the conditions that produced the
great commercial depression which has ex-
listed since 1892 in this country and since
1890 in Europe.
universal overproduction- The overproduc-
ton was the consequence OF large excess
OF produei9g plant; growipg OUT Ut, oil the
supply of machinery has been so universal
and so great that the capacity for produc-
ton still largely exceeds the possibilities
of consumption Industrial investments,
except in the case of few monopolies,
are consequently earning almost nothing;
and from that two important results fol-
low-in the first place, an unprecedentedly
low rate of interest on industrial capital;
and. in the next place, the withholding or
new capital from Industrial employment
These results involve the further conse-
quences of establishing a reduction in the
market rate of interest which may quite
possibly be long continued: and investment
is being diverted to securities which are
exempt from the evil OF oversupply. Such
exemption is found almost alone in railroad
securities There has been quite furore
in London on African gold mining stocks;
but that excitement has exhausted itself
and nothing remains, either Tor speculative
or investment purposes, except the long
neglected railroad issues of the United
States. Within the last hve years the
yearly construction of new railroad in this
country has averaged barely three thou
sand miles; while, for the ten previous
years. the yearly increase averaged 400
miles. The current rate of railroad con-
struction is thus far below the ratio OF in
crease in commerce. 1t Is true that the
earnings of the roads have fallen very low;
but it is true that prices have fallen proper
tionately, and also that their receipts are
now beginning TO show material IN
general business.
The facts seem to mark out railroad Sc
curfties a form of investment destined
to receive special preference until prices
have reached a point that will bring their
yield to about a parity with that Of the
investments which are now suffering in
Gated in the fact that Europe has. within
the last three months, taken some SO.OOOOO
of our railroad investments alone. That
extraordinary movement cannot be regard
ed as merely, or in any important sense,
speculative; for the net export OF shares
previous TO this week has probably not
exceeded S.000.000. the remainder having
been new issues of railroad bonds. The
fact of Europe having made these new in
vestmen.s. is attributable, in the first place,
TO the current preference for railroad Sc
curities prevailing there as well as here.
and also to the fact that the amount OF
railroad capital in this country is so inn
mense to afford the best source OF sup
ply. These considerations show that we
are in the beginnings OF movement in
railroad investments of a new and special
nature, the magnitude of which IL is not
easy TO forecast. 1nt which seems to have
by no means reached its elimination In
view OF these edcts and indications, We
conclude that the upward movement i'm
prices has not yet reached its climax, and
that 1895 is likely to prove an extraordinary
year in railroad investments.
The foreign demand for our securities
has shown no abatement during the past
week. About 10.o0O,6OO have been placed in
London and Germany. including S.coO0 of
the treasury stock of the New York Cen
United States loan. The amount CT our Sc
curities taken in Europe since the middle
of February last is close upDn 1920, oQO.O 900.
Saturday. bank CIearing..
At OBSERVATION-DISCLOSURES, sl2. 4l2,l4s; bal
ances. 2076,5l7. For the understandings,
s73. $50. 9ii: balances. sle.12e. $40.
At Baltimore-Clearings. $2.3l5.I16; bal
ances, $293, 275. For the week-Clearings, Sl3,
500 006: balances, 81, 709. 232.
At New OrleanS-Clearings, 81, 100, 239.
At MISUNDERSTANDING $29o,OS9: balances.
s16S. 900.
At Chicago-CIearings s13, s0S, 900; total
for the week, s9l, 900: corresponding week
last year. SS4 69S. 600. Money. 4i2qo per cent.
mercial paper. New York exchange zoe
premium. Sterling rates, posted, S4.& and
s4S7
AT Cincinnati-Money. 4@s per cent. New
York exchange 75c premium Clearings.
$4,000: for the week s13. $50; same week
last year. s12. 955. go
At New York-Clearings. SIP $50 1862; oal-
ances. $685.. 0e1. For the week-Clearings.
$685.. LIS. 769: balances. s43. $50. $50
AT Boston-Clearings, Sl5. 1881; balances,
81 127. 500 For the week-Clearngs, @l, &C.,
443 balances. 50. III, 941.
At St Louis-Ciearings, $500. o5s; balances.