The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-09-20
FOREIGNERS AT LAST REALIZE
THAT THERE IS SOLID BASIS
FOR A BOOM.
MARKET MAY BE OVERCOME
HENRY CLEws WARNS TOO SAN
GUINE BUYERS AGAINST
OVERSTOCKING.
Indicate the Activity Which Is De-
velOping In the South and
West.
Special to the Globe.

NEW YORK, Sept. 19.-In his weekly
review Of the financial situation. Henry
CIews says:
;. We have had another week of great activ-
lty IN Wall street, with complete ascen-
dancy of the bull element, continued de-
considerable gains in prices. The speculative
movement continues to broaden, and orders
from the interior are upon a scale perhaps
never equaled in the history of Wall streets
greatest booms. Coming concurrently with a
revival Of trade the most sudden and COM
plete that has ever been witnessed in this
country, those having idle funds on hand
seem 10 nave come to the conclusion that
opportunity has arisen for using them profit
ably in transient purchases of securities such
as occurs but once in lifetime. With a
volume or demand such as is thus created,
the larger professional operators find no lack
OF material for forming pools for the man
1pulation of stocks upon any scale that their
means may permit and they can safely de-
pend upon the outside element for co-operat-
ing for almost any advance of price that
tney may determine upon. The bears
stand nowhere In the face of such an upward
propulsion; and their sales and pessimistic
pretenses have only advanced prices. Even
London, after incredulously imagining that
the great rise is but a temporary efferves-
cence after long strain Of repression and
consequently unloading upon us some 200 600
shares of railroad stock, has at last been
caught by the infection, and during this week
mas been quite a considerable buyer of our
issues. Having take all they had to
sell without VINCE the British metropoli-
tans have come to the conclusion that there
Is more sol1dity than froth in our BOOM and
are becoming eager to take hand in our
game; and have to confess that the time is
past when, in financial operations, London
can control New York.
Ali this has been, from time to time fore
Swallowed in these advces: and l have yet
to discover any evidence that this great re-
Vlyal has exceeded what, as a rule, is war
ranted by the broad recovery in the national
conditions which regulate the value of our
corporate securities. On the contrary, to my
view, the movement is far from having
reached its elimination. Yet, at the same
time, it is undesirable that the market, how
ever regulated by solid considerations, should
run into stage of unrefecting excitement
1t is important that caution should be main
tanned against a wild phase of speculation :;
and such caution must be maintained by the
buying element Business prudence and cool
Judgment cannot be ignored without danger.
The current immense operations are conduct
ed almost entirely upon a credit basis lin 9TH
er words, on margins The ability to resist
bear attacks or unexpected adverse condt-
lions is therefore measured by the strength
of these protective balances in the hands of
the commission houses. The exposure of a
market like the present one lies largely in
the fact that persons holding stocks are cas-
lily tempted to use their profits as margin for
further purchases. Those purchases tend to
further force up prices, and such advances
cess prices may be artificially forced up with
out at the same time providing adequate
means, on the part of the holders, to support
prices against assault. In such q condition
of the market it matters little how much val
ues may be warranted by bona fide conditions
The bears find the holders carrying more
stock than they can protect under pressure;
their attack is therefore directed to the ex-
haustion Of margins; and, that accomplished,
they reap rich harvest while the over-san-
guine holders are slaughtered. 1t is worth
considering whether from the too-avish in
crease of holdings, through this sort of pro-
cess, the way is not being prepared for a
bear" campaign later on which might great
ly change the present hopeful aspect of the
market and Indefinitely postpone the further
advance which, with prudent moderation in
operations, would be sure to come. A word
to the wise is sufficient.
The very large shipments of currency to
the interior are beginning to direct attention
to the course of the money market. 1t is
true the reserves are still ample, but there
is no saying how much further the shipments
of money to the West and South may run;
and. in any case. the loans of the banks are
expanded to a degree never before reached
and continue each week to increase. Under
these circumstances, it is gratifying to wit
ness the drift in the foreign exchanges toward
the gold-importing point The government re-
port Of our foreign trade for the month OF
August shows that we cannot be far from
that stage. The exports OF merchandise Tor
the month exceeded the imports by $40, 00O; OOO.
or allowing for net import of $2,300,0U0 OF
gold, by $45 DOC, 0G0 For the same period OF
1885, the excess of exports was only 22,0oo-
600; and in 1895, the imports exceeded the ex-
ports by S13 900 600. The amount of stocks
returned from London during last month are
estimated to have amounted to a value OF
about So, 900, 900; which, deducted from the
trade balance above stated. would leave, about
SS5 coo 900 to our credit from abroad at the end
of August. 1t seems more than likely that
this. together with the subsequent large eX-
cess of exports over imports: must produce
an influx of gold at an early day, and that to
a liberal extent
At the close of the week there is disposi-
ton among the larger holders of stocks to
fortify themselves by partial realizings In
the present position of the market that course
is prudent Quite an important line of stocks
have had Unexpectedly large advances, and
process of review and testing of conditions
"bear" assaults which may be forthcoming.
It is wise to guard against over-sanguine
expectations steady advance is far more
prices than a sanguine process of buling
which invites assault from the pessimistic