The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-09-13
DRIFT OF COMMERCIAL AFFAIRS
FOR THE PAST WEEK ADDS
CONFIRMATION,
STEADY GAIN ON ALL SIDES.
EVIDENCE THAT TRADE HAS RE.
TURNED TO ITS NORMAL
CONDITIONS.
And Short of TroubIes-Henry Clevs'
Terse Way OF Explaining Re-
newed Activity.

NEW YORK, Sept. 12.-In his week
ly review of the financial situation,
Henry eClews says:
Since my last advice the market for Sc
curities has exhibited the irregular strength
aud steady activity which have characterized
1t during the recent weeks. In the general
outside conditions affecting prices there has
been material change
The drift of commercial affairs throughout
the country adds new confirmation to the
promise of an era of sound and steady ma
tional prosperity which has laid the basis
for the general large advance in securities.
There Is every evidence that the trade of
the country has already recovered its full
normal volume and that the obstacles that
have so long obstrueted it have now en-
tirely lost their srepressive force. This is
paced beyond question by the fact that. for
the week ending Aug. Is, the transactions
at all the clearing houses of the country
exceeded those for the Ike week of last year
by Al per cent, while for the month of Au-
months volume exceeded that of August,
1890-Which was the largest year in the his
tory of our banking operations-notwith-
standing that general prices are now fully
10 per cent lower than they at that
period. Further evidence OF the large ex-
panson of business is afforded by 1.-The loans
and discounts OF the New York city banks.
For the week ending Sept. 4 this item stood
at 1858 100000 which, it will appear from
the following statement Of the maximum of
loans in the fall months since 1887, is the
season
last ten years:
1897. Sept. $3.50 800, OOO1S92 Sept s4s7 100 goo
1886, Oct IL 1885, 100,0001S91, Sept &c 4O8 900 600
1895, Sept IA 522 COO $780, Oct. II 406 800 600
1894, Oct. 500 800, O0018S9, Sept % 499 300 coo
1893, Sept. 2 100000, 0C0 1885, Oct q 393,7000 coo
The city banks are now lending IA per
cent more than the highest volume ever at
tanned in the history of their operations
This is incontestable proof that the amount
OF current business transactions exceeds all
precedent. 1t is true that we now have
about 1OGo0,CGO more population than we
had in 1S90-the period of highest previous
maximum of loans-but against that fact
must be set eff the great fall in all values
that has occurred since that date.
This sudden expansion to condition of
normal activity has in it no element of spec
ulatiCn. 1t is in response to bona tide wants,
and shows zone Of the dubious elements of
a mere manufactured boom" The fact
that such a measure of recovery has come
hithin the short period of three or fon,
months is very satisfactory sign of the
sound financial condition of men of business.
1t means that the weak Clements of credit
have been weeded out during the recent de-
preston and that merchants have their
finances in sound shape for meeting the re-
QuirementS of a period of large commercial
expansion.
What may be the magnitude of those re-
cuirements is inferable from the extent to
which the satisfaction of a wide range of
wants has been postponed during the last
four years. In every branch of product on
excepting those most essential to su5ss-
tence, this process of postponement has
been in force. In buildings in the home and
its furnishings. in the wardrobe, in our fac
tories and in the construction and main
tenance Ct railroads. this avoidance of ex-
pcnditures has been rig diy enforced. Four
years of this sort of econemizing is probably
about equal to the citizens total eXbenGi-
lures of enc year; and that years measure
of abstenton from the supply OF reasonable
wants has now to be made coed. 1t is enc
thing that there should be such an inlpor-
tant pressure for extra supply of wants
1t is another that the business thus created
should be done at fair rate of 5rrcfit On
The downward tendency OF prices has been
arrested; surplus stocks are being fast Gear
ed off, and in all directions eonzumEton is
gaining on production. At last, therefore,
we seem to be in a fair way towards rem
edying the great excess of supply over con-.
sumption, which has for several years past
| been forcing the great fall in prices and the
extreme depression in business. We have
in fact, reached "a new starting point UPON
lower basis of costs of product.on and
OF prices to consumers; which means a
broader production and the capacity for "a
larger consumption per head of population
| than we have hitherto eaiz-d, to say nothing
Of the new wants ari.;cg from an increase OF
10eGO,600 in our population since the begin
ming of the current decade. These facts
have been steadily forcing the REIMBURSEMENT
which we now see in full opera ion They
explain the great revival and justify it by
making the movement natural and pe-ma-
nept
1t IS this process which constitutes nine
tenths of the cause of the current remarkable
recovery in the market for securities. Other
minor causes, chiefly of political nature
there have been. but they would have
produced little visible effect without this
radical reconstruction in the conditions Of
production and distribution, of supply and de-
mand. in the commercial markets. The people
find no difficulty in comprehend ng the near :
ing of these new elements in the situation
the factors tell their own story to every com
mon sense observer; they explain to every
b0dy'S satisfaction the basis of the prophecy
ings of better times Il is - is clear compre-
hension of sound and natural reasons for eX-
pectng an era OF renewed national prosperity
which explains and justifieS the present san
guine feeling on the stock exchange. These
conditions have made speculation inevitable
because they have restored to securities all
the inherent value they had lost within the
last four years of decline. Thus the market
needs none of the arts of professional manip-
ulation to put up prices. Values rise because
the earning capacity of corporations is in
creased, and because that increase is seen to
be of bona ide and permanent nature. If
prices do not advance at once to an extent
commensurate with the Importance of the
causes affecting them it is because of the
great breadth and d .yersity OF the supply of
issues awaiting the Improvement Prices can
be raised only by passing through a market
process of dealings Those exchanges have to
be repeated indefinitely to produce that effect;
and when the stock of issues the market is
endleSsly varied and enormous in amount
the mechanism of finance can accomplish the
task only by a process OF slow detail and by
constantly changing operations from set
of issues to another. This must account for
the seeming s,owness of prices in advancing to
a parity with the improved conditions affect
ing values; and this It is which affords oppor
tunities for bear manipuiations and fire.
uuent realizngs. But, through all these
citations market values must continue to ad-
vance; and 1t may quite possibly take several
months before they have reached a point at
which conservative men will deem it prudent
to pause.
London still hangs on the skirt of our stock
market, being alternately buyer and seEer.
The Bank of England appears to be using its
utmost influence against purchases Of securi-
ties which might bring of its gnld to
New York. On Thursday it refra ned from
advancing its rate of discount, which is evil
dence that its exposure to losing gold is at
least not becoming more aggravated. 1t is,
however by no means improbable that it may
put UP its rates at later stage. for cur eX
change market is in such pos ton that the
arrival of a few millions more of cotton bills,
in addition to the large amount being made
against large shipments of cereals, might pro-
5dIlce imports eff gold. 1t remains to be seen,
however whether the relative rates for money
AFT New York and London might not cause ex-
mort bills to be bought up here when ex-
change was largely n cur favor last year,
in which case imports of gold might be more
or less postponed.
America is long of crops and short of
troubles. whereas Europe is short of crops
and long of troubles
-LONDON MARKETS.