The times. [volume] (Richmond, Va.) 1890-1903, 1897-10-22
THE DEPRESSION IN THE STOCK
MARKET.

The banking firm of Messrs. John II.
Davis & Co.. Of New York, put out a cir
cular at intervals which discusses the
current condition Of affairs with great
fairness and acumen ordinarily. Their
latest circular has the following In ex-
PLANTATION OF the recent depression in the
stock market:
Because the stock market has sold off,
and the daily sales are only about 30 per
cent. OF what they were In early Sep
TENDER it Is assumed IN some quarters
that the upward movement has not only
eliminated but that we can hope for MOTH
ing better for months TO come. rms ~ a
narrow and shOrt-sighted view. we had
a LARGE and broad advance. IL was per
fectly natural that many Of the large hold
ers OF stocks should sell out and take the
remarkable profits in sight Then, ther
pecuniary interests demanded lower
range of values on which 10 replace their
holdings II was also natural That aIler
the market had reached high point,
large number of the smaller operators
should be carried away by Visions OF an
uninterrupted advance, and buy at the
top. on as slender margin as their brokers
would accept, and that these brokers
should insist upon stop loss orders lot
their own and their customers protection.
A general or concerted selling movement
by the large operators, for purposes indi-
Gated above, uncovered a quantity OF such
stop orders. This increased the stocks
for sale. and helped the decline; further
fan was the inevitable result. The dmin-
ishing prices scared the tiinid and they
filled the air with predictions OF disaster
so the buying power was diminished.
Every possible or plausible pretext MAS
utilized 20 hammer the market The
threadbare spectre OF an early war win
Spain was held up 10 view. The transfer
Of control OF two gas companies In Chi
caeo was made the occasion of dire pre-
dctiOns as 10 the effect upon one OF the
most active stocks. The yellow fever IN
the Southwest was esteemed so contagious
as TO give iaundiced hue to every South
crn property The complicated political
turmoil I'm New York over the election or
q Mayor was blaZOned as new menace
to the safety of the Republic. The rails
Ing of the interest rate on money to
more healthy and normal figure was the
text to a cry Of tight money The raising
Of the Bank of England rate from IL per
cent to 3 was heralded as bar to further
operations for foreign account. In short,
the most trivial events were made 10 do
duty as catastrOphes Of dark and dismal
moment-and as a result Of the combina-
ton the average price of twenty active
stocks dropped from G7.23 on September
18th to 6O.3S on October 18th. or about one
third as much as It had risen from the
low point last spring. The great facts
tending 10 increased prosperity still exist.
The underlying conditions continue all
right The farmers Of the West never
had so much money"
We have no doubt this IS I'm large meas
ure the correct explanation of the fan in
the value OF stocks. In one sense. the
public at large is very little interested in
the prices that stocks bring in Wall street.
But I'm another sense It has the deepest
interest i'm those prices. When stocks are
high in wall street the country is usually
in a prosperous state, and when stocks
are low there it is usually because bust
ness I'm the country is depressed. Wall
street is. therefore. In a measure a barom-
eter FOR the business conditions OF the
country. We have paid no attention to
the recent depression i'm stocks, because
we have felt that their depression was
temporary. Those employments which
contribute TO the high prices Of stocks
are i'm a progressively prosperous state
now, and their prosperity will grow for
some time to come. But the country is
shutting its eyes to a terrible peril when
il supposes that because these employ
ments are prosporing our troubles are
ended The cause for our troubles lies
IN the fact that our currency system
supplies the farmers with no media Of
exchange. and, though they are not say
ing much Just now. their discomfort is
Just as great to-day as It was year ago.
Nothing has occurred to satisfy them, and
their mutterings go on to-day as hereto
fore
We must amend our currency laws so
as TO give these people content, or we
will run dangerously near to the greatest
peril the country has ever known.