The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1899-02-06
HENRY CLEWS'S VIEWS.

HENRI VIEWS.
Henry Clews in his weekly New York
financial letter says: 1.-THE high range of
prices for securities has had another week
of test, but with no very marked results,
except that the market has become hesitat-
ing. There are appearances of certain large
professional operators having done consider
able realizing, and that factor may account
for some declines in those stocks which have
advanced most. These operations have
naturally caused some shrinkage in the
volume of business at the exchange, the
sales for the first four days of the week
having averaged ob6,UVU shares per day, COM
pared with an average of l., 444,U UJ shares Tor
the corresponding Gays OF last week. Inls
sort of reactlon from The previous nigh len
sion of the market was no more than was
to be expected, and the TACT that II mas not
been greater may be attributed to the pres
ence of an extraordinary outside element,
which is ranged almost entirely on the bun
side. That class OF operators seem 10 be
more than usually flush of means, and their
Sangulne estimate OF the market INDUCES
them to stick to their holdings with tenacIty.
In our last adyices we intimate a prop
ability that the higher grade OF stocks nav
ing been advanced TO extraordinary prices,
attention would probably be turned TO the
lower grade issues. This has been the most
notable feature III the market. AS q rule
stocks that have anged in the teens ana
the twenties and thirttes had previously par
t~icipated comparatively little in the buying
movement, but now great and small opera
tors alike are turning 10 them as relatively
cheap, and the probabilities are that this
stage in the current campaign may be at
tenued with some further development.
Nevertheless, the real1zings by leading
operators Of large blocks of the hlgher
grades of stocks relaXes the backbone OF
the market, and while there may be con
siderable activity and some rise IN special
ties among the cheaper issues, yet 1t is rea-
sOnable to expect q nuctu9tlng movement
rather than any further important general
rise. Under these circumstances it will be
prudent for the present 10 limit buying TO
breaks in prices and to realizing on the raj
lies. thus making i~n-and-out turns and rely
ing on an aggregation of small profits rather
than holding on for large ones. There is,
however, one group of stocks which seem
to be looming up hopefully. The Chicago
y Alton purchase tor the pene1t OF the
Southwestern roads now has an encourage
ing look, and If cannot ran
to be of immense benefit to the securities
affected, Missouri, Kansas & Texas probably
benefiting more than any other road from
the contemplated arrangements
Taking the stock market as a whole,
reached q stage at which conservatism is In
order. The prices of the higher grade stocks
have reached an unprecedented elevation,
and even if the improved finances and pros
poets of the roads have warranted a con-
siderable rise it is to be that
the public have not yet become accustomed
to this extreme advance and are not pre-
pared to regard the new quotations as per
manent. 1t is. however, of some significance
in this matter that practical railroad men
are the strongest bulls to be found, and that
they are so on the intrinsic merits of the
IdllIOdU SlIQdllOll. ivy q tOL DdSSCQ
through the severe trials of recent rate cut
ting without learning something. Managers
have been driven to economy IN operating
expenses and have MADE improvements IN
plant which will enable them to carry
freight profitably at lower rates than have
ever been known. These OUTLAWS have for
the moment absorbed earnings which
might otherwise have gone to the stock
holders, and in this way some disappofnt-
mentS have arisen in view OF the large gross
earnings but it is an eminently wise and
conservative employment or income and will
put the roads in a position Tor increasing
their future frofits, while at the same time
giving the public the benent of low charges
tor transportation An intelligent writer to
one of the morning papers makes the fol-
lowing remarks pertinent TO the railroad
situation which present some very important
facts: Railroad stocks which seemed UNI
likely ever to earn a dividend are now
mounting in value. The cases of Union Pa
cifc, Northern Pacific, Atchison and South
ern Railway are noteworthy. Each OF these
great companies was practically fresh from
reorganization, and In each or them there
has been developed a new earning capacity
of magnitude. Many others reflect the same
conditions on a smaller scale. To those
well informed and in a position to take an
intelligent look into the future these are
considerations which materially contribute
to confidence in railroad stocks as invest
ments. They have had their influence in
causing the recent great advance in prices,
and they will serve as a potent check
against any violent reaction from the scale
Of values now estaollsHea' SuiI. IL must
considerations is fully appreciated by the
average investor or Spectator, and some re-
cession in prices is therefore TO be regarded
as a possibility, if not a probability. But at
the same time it is not to be lost sight of
that in spite of the .,osclliatlons incident TO
speculation our railroads have evidently
reached a stage of development at which
the issues of the older and better located
lines must be acknowledged as really first
class Investments, as much so as III the case
of British railway stocks, stable as to their
income and ranking I'm their interest return
close alongside mortgage bonds, and when
this prospect comes to be more generally UNI
derstood the prices that nov surprise every
body will appear legitimate and normal.
The money market presents nc new
features of importance. Borrowers find an
abundance of money for all legitimate pur-
poses and there is nothing to indicate a
probability of higher rates for some months
to come, The principal factor tending to
prevent a drop in interest rates is the dis
position of the banks to discourage any dis
turbance of the large American balances
now resting at the European centers. The
foreign banks seem 10 have more use for
these funds than we have and 10 bring
them over here in the shape of gold would
have the effect Of depressing the New York