The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1898-01-31
STOCK MARKET RISES IN SPITE OF
CERTAIN REARISH NEWS CON-
OPTIONS.
RAILWAY STOCKS STRONG
ON REPORT OF IMPROVEMENT IN
THEIR FINANCIAL STATE
MENTS.
Europe Now in the Role of borrower
Henry CIews' Weekly
Review.

NEW YORK, Jan. 30.-In his weekly
review Of the financial situation, Henry
CleWs says:
During the past week the Wall street mar
ket has taken a sharp upward turn. Inc
movement has disregarded the furry arising
from sending the man-of-war Maine 10 ma
vana and the sensitiveness created by the
Teller resolution in the senate. 1t has arisen
in part from the growing bull. feehng on
the stock market, but more speclncally from
certain conspicuous facts showing the strlk-
ing Improvement in the finances or the rail-
roads due to the last six months increase OF
traffic. A statement has been made OF the
earnings of the Rock Island covering the last
nine months showing an increase in net
earnings over the same period of last year
amounting to 81, 500, 000. The gross earnings
of Missouri Kansas & Texas for the last SIX
months are reported at s. goo 000 which leaves
a surplus of $1,000,000 over operating eX-
penses and fixed charges for disposal at the
discretion of the management. The Wander
blt stocks have also shown a large advance
upon somewhat indefinite but apparently well
founded outgiYingS OF new and favorable ar
rangements in connection with the New York
Central and Lake Shore systems. 1t is also
stated that it is intended not only to merge
the West Shore organiza ion with that of the
New York Central but also to bring the Lake
Shore actually into the New York Central
corporation. Also ii is intimated that the
scheme under consideration involves union
of the Lake Shore and the New York Central,
under the latter name, with advantages to
stockholders of both companies Further,
the deal is understood 10 embrace the incor
poration of the Michigan Central in the Van
derbilt system, by exchanging its stock for
per cent debentures of the West Shore rail-
road, at rate not yet stated. Also, the
election of Mr.. Depew a director of the
Ontario & Western is construed implying
a deal between that company and New York
Central; this however, lacks official cOnfr
nation. But these repor,s, coupled with the
reduction in fixed charges through the recon-
struction of the debt of the New York Cen
trail, has naturally caused large buying of
the Vanderbilt socks and raised expecta-
ton of a permanent increase in the divi-
dends of the New York Central. These facts,
coming simultaneously to the surface,
construed as showing a process of decided
recovery in the financial status Of railroad
properties at large. At the same time the
continued light construction of new lines
is viewed as a favorable factor. For the last
five years the construction of new roads has
averaged barely 1900 miles per year, or less
than l per cent, while the concurrent increase
in population has probably been not less than
IL per cent. Now that business is reviving
in all parts of the country this is factor
which must have very important bearing
upon the earnings of the railroads, for there
is not only more freight to be carried but
relatively less road to provide for 1t than five
years ago.
The foregoing are the special causes of the
marked revival of the tone of the stock
market. In addition, the real Improvement
has received support from the general large
increases of current earnings and from the
tendency towards growing ease in the money
market. The extraordinary increase in de-
posts and the large gain In reserves shown
by the last bank statement are evidence of
the growing accumulation of funds seeking
employment at this center. These bank fig
ures, however only partially express the real
extent of the plethora. 1t is necessary to take
into account also what we are lending to
Europe. In my advices of last week refer
ence was made to the large amount to which
New York is under advances to Europe. Those
loans have since been increased and it ap-
pears doubtful whether $50,0OO0O0 would now
cover the total. Other home centers have
made ike transactions. l have direct knowl-
edge of two loans, of 81, 600 coo each to large
German banks made by a Chicago institution
at to Az per cent, and other like transac-
tons are said to have been made at Chicago
to an amount approXimating $40, 600 900. Ad-
Vanees to European banks have also been
made by Boston banks and capitalists, to
what extent | have no positive knowledge
but estimates of the total range between
$2O,OOO,O 600 and $25 900. Putting these facts
together it would appear that this country is
now lending Europe $50, 000, 900 to $50 600 600
This is significant, not only as showing
the extraordinary accumulations of capital at
our home financial centers, but also as dem
onstrating that have become full partici-
pants in the credit operations between the
worlds financial centers, able to lend upon
a large scale as well as to borrow when our
convenience calls Tor it. The local financial
institutions are quite disposed to encourage
these operations as the only means of prevent
ing glut of gold, which we do not need and
aVertlng still lower rate of interest. More
over this experience clearly shows the ad-
vantage of remaining on gold basis II
enables this country to loan Europe $500 0O0
wv OF money at higher rates of interest than
are oDtalnable on this side. This could not
De done II our money basis was not of the
same intrinsic character as that of England
germany, etc.; whereas, if we were on the
10 to l free coinage basis. no nation of anv
Importance, excepting China and Mexico
would take our money in direct cash dealings
on any terms whatever
The revival of the silver agitation in oon
gress, in connection with the resolution Of
Senator Teller, has for its purpose making
II imperative on the part of the government
~ ~ F9Gognlze the word CON-" contained in
the United States bonds as meaning either
gold or silver as the money in which both
principal and interest shall be PAYABLE II Is
not at all hkeiy, however, that this new at
TACK upon the government credit will pass
into law. AS matter of fact it is absolutely
impossible during the present administration.
In view of this new attack upon government
credit, the following statement will serve To
show the strength of the United States treas
ury at the present time, and how ridiculous
the bringing forward Of such resolution is.
Total issue Of greenbacks.. .$346, 6S1 Ole
Total issue of Sherman notes .... loo, 34S $50
Silver held to secure Sherman notes -'O
at 51A cents per ounce (the pres
ent prlce).. .............. 500 S59. 026
Greenbacks in treasury 80. .... 81, 200 GOO
sherman notes .............. 1904, 344
Deduct this amount from the OUTSTANDING
greenbacks and Sherman notes and 1t leaves
in actual circulation $780, O65, 1877. AS an offset
thereto. the United States treasury has on
hand free gold amounting to S163, $40 OO0
which, deducted from the outstanding notes,
leaves balance of $138, 1876 1877 unprotected by
actual gold or its equivalent and backed only
by United States government credit Surely
the vast resources of this nation ought to be
ample to protect this small residue of notes
and make them as good as gold in public
estimation, without it being necessary to have
the actual yellow metal in the treasury
AS an evidence that this country has had
silver enough already infused into its national
money, the average cost price Of the $1O2 1884,
736 silver now held by the treasury against
the outstanding Sherman silver notes was 921b
cents, whereas the present price is 57% cents
per ounce thus showing loss to the govern
rnent thereon of $S8, 425, 10. Before the McKin-
ley administration expires, the worlds output
OF gold will aggregate enough to nullify all
attempts to force double standard in any
country in the world where the single stand
ard exists. With this in view 1t certainly
does appear absurd to try to foist upon this
country the free coinage of silver at 16 to l.
when the ratio should be go to l to euualize
the value OF the two metals.