The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1899-03-07
TINE D SLOW DOWN
Henry ClewS Says Prices are
High Enough Now.
EFFECT OF FRUSTRATING
What the "Open Door" Has
toDo With the Case.
EFFECT OF FRUSTRATING

SOnaDly active, Win the speculative "a
elements largely confined to the indus
trial list And yet keen observer may
detect the gradual approach Of influences
that may before long subject the present
scale of values to a sharp trial. The eX-
ternal conditions affecting prices,-such
as railroad earnings and business pros
perity,-remain quite as favorable as they
have been. But the thing to be noted is
that the opinion is becoming more general
that these conditions do not legitimately
warrant any further uniform advance in
prices; on the contrary, the feeling is not
exceptional that current values are not
to be guaranteed and that they are held
up more through the extraordinarily san
guine temper of outside operators and the
absence Of any disturbing elements than
from common conviction that current
prices accord with the intrinsic merits
Of stocks. a sanguine speculative tenn
per and ease in money may possibly keep
prices above legitimate values with con-
siderable persistency; but there always
becomes a limit sooner or later TO the
extent to which such a state of things
may be carried. When prices have reach
ed the highest pitch to which they can be
pushed, a variety of reactionary influ-
ences come into play. When there is no
! longer any cuear chance of profit in buy
ing, the demand slackens. Prudent holders
begin to realize and keep out of the mar
| ket until lower prices afford new induce
ments to buy. The market gradually be
comes stagnant, which is one of the most
fatal tests of strength. After some yield
ing in prices, margins are impaired and
then comes in compulsory selling, which
interested efforts TO sustain the market
are usually insufficient to Offset At this
point arrives the opportunity for the
bear" who finds the market an easy
prey to his tactics of attack. These are
the influences thai invariably come into
| play after an extraordinary rise in prices:
! they are natural TO the machinery OF
/ speculation; and, in the present situation.
! it will be wise to keep sharp outlook for
/ the setting in of this sort of reactionary
! drift.
Still, it seems reasonably safe to ex-
pect that. in the present case, such a re-
action would not run to any serious
! lengths The large profits made on the
: recent rise have no doubt made the spec
ulative interest exceptionally strong.
! There is no probability that serious re-
| lapse would be encouraged by conditions
| in the money market, for money is likely
/ to become very easy after the middle Of
April and remain so during the summer
I
! tha railroads and the great general pros
perity of the country have invested secu-
rites with a much higher intrinsic value
! than they have possessed during recent
/ years; and therefore after a fair shrink
age in prices stocks would be considered
cheap and bring in new buying orders.
There is vet another consideration
which may deserve attention in this con-
nectiOn. The recent immense creation Of
trust organizations is having a con-
! tracing effect upon the demand for bank
discounts. As rule, these new organiza-
tions have been constructed upon a basis
which gives them a large surplus for
working capital They are consequently
buying their raw materials for cash, with
liberal discounts, and need little or no
/ bank accommodations. The consequence
is that probably many millions of paper,
formerly made by the original separate
companies and firms, is now beginning TO
disappear from the market. How far this
new condition of affairs may prove per-
manent remains 20 be seen; but. for the
present, the banks are finding hiatus in
their loans which they are anxiously wait
ing to see filed. In some cases, the bank
managers are considering The expedent of
investing their funds in railroad bonds and
other first-class securities and some have
already taken that course. The present
high prices Of stocks are against max
ing such investments with much free
dom: but it seems far from improba-
BILE that in the event Of a break in the
market, there might be an important in
vestment demand from this source. For
the foregoing and other minor reasons
ii appears to me that general break in
prices would not proceed 70 any serious
length before ii encountered a check
! ,a 81,
dications are that the market is likely e
be more or less irregular during the en-
tire month and attended with frequent
fluctuations. resulting probably in a gray.
itation TO lower prices. As We approach
the first of April money viii become tenn
porarily more active and Will command &
higher rate Of interest. We therefore. for
the present, advise selling on rallies and
only buying conservatively on good break.
and then only for quick turns and moder
ate profits.
The adjournment of congress will, o.
the whole have a favorable effect up0l
Wall Street interests. The various import
/ ant questions arising from the new ma
! tional situation created by the war VIII
Spain have been disposed of in one wa,
l or another; in some cases temporarily. il
others by political compromises; but Il
= very few instances satisfactorily 70 III
common sense and patriotism of the couu
try. But. in what has been done or lef
. undone. there Is little TO disturb pubf
! confidence. The new session Of congress
2 viii find much 10 reconsider; and WIKI
new set OF congressman coming fres
+; from the arena Of public discussion,
/ may be hoped that the difficult problem
, arising out Of our relations 10 the Phi,
; ippines. Cuba and Porto Rico VIII be dis
= rnSe1 If in a v-av NOT only n--1ry-f-
I. the interests OF those peoples. but ais
; wisely consolidating our new position a
the foremost power in the Pacific. Tn
! ! opponents Of annexation of the Philippine
have said all that can he advanced an
= more than can be ieEilmaleiy urged o
. the sentimental side OF the question.
i TO be hoped that before the meerir
Of the next congress the public may Civ
due attention 10 the far NEE seriou
l. Questions 81 cur vast commercial int,
ests in the Pacific ana 20 the pU0tecro
Of those interests from the inevitable no:
tiii.y OF European coalitions whose inter
{ ests are dramatically opposed q thoz
T OF the United States we have no -s
= course bur % favor a policy Il free q,
: cess TO China FOR trading purposes. eQua
? IL available TO ali countries and az n
d. same tine resisting all territorial EEre.
: sions against that empire. with our pc,
:. pie intelligently aud earnestly COMMITTEE
u 10 that position. there is sufficient suI
Z port Of this policy in the attitude OF 9th.
Z governments 20 defeat the designs n q
e military powers without res5-rinE % va
= and thus this great question might be Sc
: tied on permanently pacific basis
( COFFEE AND sU-SAE Makes
B.; VI rF-.- = f~-e-a= -,-,-.,-