The Saint Paul globe., 1897-10-25
BUYERS ARE MORE PRUDENT.
RECENT REACTION HAS TAUGHT A
LESSON THAT GIVES THE
MARKET STABILITY.
He Draws a Rosy Picture of Pros
perity, Which He Sees Steadily
Growing.

Clews says:
After three weeks of realizing, with an
average drop of about 121s points in prices,
the securities market has, during the past
week, shown a tendency towards recovery.
Prices had reached point Of decline which,
under all the improved conditions affecting
the earnings of corporations, has appeared
to make stocks a purchase, whether for a
permanency or for transient operations. The
weak spots in the speculative condition of the
market had been well probed by the bears
and holders were found well prepared to pro-
tect themselves from attack Under these
symptoms of the market having reached a
solid bottom, the large operators who had
recently realized have again become buyers
on a tentative scale, ana outsiders are
newing their orders for stocks. Each day
this recovery has become more apparent,
and the market appears to be fairly on the
way toward Improvement, and with specu-
latiye accounts in a sounder condition than
they were previous to the late extensive
realizing. There has been wedding out of
the weaker element on the bull side, and
the temper of buyers is seasoned with the
prudence taught by the severe lessons OF the
laet reaction.
This recovery in the spirit of the market
has modified the course which some of the
larger operators had contemplated for the
next few weeks. The prospects of the market
had been regarded by them as at least doubt
ful. 1t was reasoned that the late great de-
cline and the consequent losses had produced
much prostration and encouragement and
had diminished the ability to buy and sent
many SanSulne 'DOllS out OF wall street
with empty pockets. Also it was said that
the four months OF high speculative excite
ment could not be maintained, and must be
followed by prolongued reaction and mac
tivity. In the mood produced by the break
in prices, there disposition to put the
NEST unfavorable construction upon the posi-
bilities Of our government becoming actively
hostile towards Spain. There was willing
ness to make the yellow fever into an alarm
ing bogy. And, above all, the opening Of
congress was viewed event attended
with many adverse possibilities as to call
for postponement of buying until the admin
istration and the senate had shown their
hands upon variety of mooted questions.
1t perhaps was not strange that
immense amount of stocks and wanted
to replace them at the lowest possible
prices should indulge in a great deal of talk
of this kind and wish to see the prostration
the new year; and, had there been no coun-
teraeting force, they probably would have
succeeded in forcing affairs in the direction
they desired. But the event has proved that
there is another power in the field. There
is class, of no small Importance, who know
when investments are a good purchase, and
who believe that, when have "bull''
situation the whole country through there
should also be ''bull'' market in Wall street.
This class have been accumulating unnvest-
ed earnings through the late period Of ma
tional depression, and, having at last be-
come convinced that the country is destined
for a steady run Of prosperity, they stand
prepared to employ their money in selection
Of such securities as seem most likely to
be benefited by these hopeful conditions
These people were buyers through the four
months advance, and, now that prices have
so largely declined, they are in the market
again, some for permanent investment, 9TH
ers for profits which they expect to accrue
within few months. The accession of this
class of buyers, together with renewed though
moderate purchases by the average specu-
lator has applied a test to the market, and
the response has shown resiliency in prices
hot hos II-n6 thn 1ar nanr tnrC N
proposed to play the part of passive bears
for some weeks from their dreams of get
ting in again at a still lower range of values.
This waiting element is beginning to buy
at current prices, and as their orders grad
ually strengthen the market it would seem
that they have their choice between increas-
cold In the meantime, we hear less about
the yellow fever, the Cuban question and
the underlined misgivings about the policies
Of congress- and nobody appears to regard
these things as having any immediate i'm
portance for the stock market. 1t may pret-
ty safely be taken for granted that the large
operators will not be behind in replenishing
themselves with stocks if they become sat
listed that there is a buying power outside
their own which is prepared to enter the
market On a scale important enough to carry
up prices and each Gay of the past week
has furnished reasonable evidence that such
is the fact. There is no class in Wall street
who better than these people understand the
great expansion that now awaits the indus
tries and trade of the country; and it would
be great mistake to infer that because they
are maneuverng to get securities as cheap as
possible they have any miSgiyings about the
true intrinsic value Of stocks at currcnt1prces
This country is under the impetus of an
unprecedented expansion OF its material in
terests. The prepondera2ce Of capital Is on
the demand side Of values. The leading op-
orators, skilled in manipulation, have faith
in higher prices for securities, and ready
to work in that direction. vigorous up
move will bring in the public who are at
present more or less absent undecided.
The return of ease and abundance of money
now makes the competition with loaners and
not borrowers. The ability Of this country TO
draw gold from Europe in large amounts will
continue for some time ahead. The continued
demand for our products, especially wheat
is assured. The increased output of the worlds
gold production means money imitation OF
considerable dimensions. The general senti-
meDt is hopeful and confident After four
years of activity should prevail and l be-
lieve will. Business expansion, with in
creased credit, is in progress all over the
world. All nations are fighting with each
other for the expansion of their commerce
to extent greater than ever before. The
greatest generals now are to be found among
merchants and bankers and not in the armies
Business enterprise. and the conquerlng of
markets will make the coming decade historic
Mines that produce gold and lands that grow
beets for sugar-making will be sought after
for wealth making. Gold will soon be abund-
ant enough to jingle in every industrious
mans pocket. People will thus become familiar
L
silver. Instead OF railroads going into the
hands of receivers, they have now become the
receivers of property for transportation to
such an extent as to make almost a car
famine. This country is at the present time
virtually loaning money to London, and the
amount may easily reach $40, ,000. 600. This is
being done by New York carrying time ster-
ling bills instead of forwarding them to Lon
don. The higher the Bank Of England rate
goes the larger will be the amount of these
indirect loans to London. If the Bank of
Epolon roto (vyhi &c M lyl aduon
to per cent and above, and the rate of in
terest be much less this side, not
likely to bring much gold this way. The
exchange market this side will be han
died in such a way to prevent it through
investments here in sterling bills. The present
excellent traffic returns evil
dence of the improvement in bust
ness in all sections of this coun-
try. Railroad earnings alone produce div
idend and interest money on the securities is
sued by such corporations, and the only relia-
BILE evidence of intrinsic value is the net
money made by these transportation COM
panies. With these facts in evidence, it will
not be an easy matter for the bears to
pound values down and keep them depressed
for any length of time.
The money market has made clear turn
in the direction of settled ease to continue In
any event until next spring, quite pos3i-
bly, next fall. The outflow Of currency TO
the interior has almost entirely ceased, and
the next movement in order is the refux Of
the $50 000, 900 more that has gone to the
West and South since last July. The South
NAV REQUIRE some further remittances IN
connection with the cotton movement, which
has so far been unusually restricted, and for
that reason may be expected to materially
increase next month. But it is not unlikely
that the increase in the cotton exports may
bring gold to this side Of the Atlantic, with
the present extraordinary trade balance in our
favor.
Probably the present net Indebtedness of
other countries to the United States exceeds
all precedent. For the month of September