The sun. [volume] (New York [N.Y.]) 1833-1916, 1899-01-02
rnr rroMIsr o. ZEE Nsw rEaN.

Isrlv. we're enormous, and surpassed those OF
any previous day of the year. Prices. also.
we're pushed IN, In many cases. to the highest
point II the campaign. The natural result was
n slight reaction on Wednesday, followed, how
ever. on Thursday. by n recovery which was
sustained until the close OF business on Friday.
This. too, was in spite OF the disposition OF on
orators to avoid going into the new year owing
money. and to their consequent selling to real
I've Profits and pay of debts. The slight con-
traction In loans. due to preparations for to-
morrow's interest and dividend payments. had
no effect beyond producing one or two little
furries in interest rates. which were soon over.
whether the activity in stock speculation
which has lately prevailed will be resumed to-
morrow ON the sam scale. and. indeed.
whether il may not be succeeded by compare
tive quiet, IL a question which only the event
will answer. II the stocks recently bought
have passed into the possession Of men able
and willing TO hold them for the income they
Weld. further buying will necessarily lead to
n further advance in prices. and. by exciting
the cupidtty of the public. may induce it to
renew its speculative operations. II. as is more
probable, the stocks remain In the hands Of
men who have bought them to sell whenever
they can be sold at a profit, a general l~iauidat-
ing movement may at any moment set In and
cause a general decline.
Even purchases made by investors, not upon
their own knowledge and judgment. but upon
n vague belief, for which they can give no rea-
son. that they are good bargains. are often as
likely to he thrown upon the market as those
of speculators. or the thousands who buy
stocks and bonds and pay for them. and put
them away intending to keep them, few take the
trouble to investigate the facts on which their
value depends. They read in the newspapers
that the earnings OF a railroad are increasing.
that such aud such an industrial corporation is
doing n very profitable business. and that Ger
tain noted capitalists have bought largely OF
the stock and bonds OF another. Upon these
indictments, and upon the rise in prices OF the
securities concerned. they buy them, but their
faith in them has no root and withers away at
the first blast OF a panic.
A fact which should also be taken into con-
sideration l. that speculation in stocks usually
rrecedes a revival of general business. Just as
@ panic in stocks is the precursor OF q like
breakdown everywhere else. Property repre-
scented by engraved paper is so much more
easily bought and sold than merchandise that
1. is the first to yield to the influences OF alarm
and OF hopefulness. When men fear that they
are going to be pressed for ready money they
sell their securities before trying to force a sale
Of their goods. and. conversely. when they
have money lying idle and scent a coming re-
vival OF prosperity. they buy things which cost
nothing for storage and insurance. and cannot
be damaged by the elements, in preference to
bulky commodities which need to be housed
and watched. The stock market has, for this
reason. come to be accepted as a financial
barometer, Of which the fall threatens a storm
and the rise fair weather.
For another reason the stock market is a |
truthful indicator OF the business situation. |
The securities there dealt in represent capital
invested in undertakings by incorporated COM
ranies the profits of which depend upon the
ZANE conditions that affect the profits of indi- |
viduals. The men who deal in them are alert
to note every change which inures to their ben |
eft or their injury, and az soon as such a
change occurs. or even as soon as it is seensto
lie impending. they buy or sell in order to take
advantage OF it. For example. the recent rise
in Western railroad stocks which. for years.
had seemed to be valueless. was due to the dis
covery. months ago. by sharp-sighted observ-
ers. that the earnings OF the roads were likely
to Increase, as the result OF the better prices
which the farmers living along them were get
ting for their produce. What these sagacious
men foresaw has happened, and. %latterly. the
general public also has discovered it. Hence
thelarge buyinglof Western railroad stocks and
bonds. 1t is the same with the securities that
represent Industrial undertakings. now be-
lieved to be on the eve Of becoming profitable
or to have already become so. The right to
share In their earnings Is esteemed more valu- |
able than it was. and more is paid for il. Pos
sibly. some Of the stories told concerning these
companies are too highly colored, and posi-
bly,. too, the economies in expenses which are
to be secured by the recent great consolida- |
tions effected among them may be overesti-
mated; but. making all needful allowances, a |
conviction remains that the great industrial
corporations whose stocks and bonds are
bought and sold on the Stock Exchange. have
entered upon a career Of prosperity which will
result in great pecuniary benefit to those who
own interests in them. This conviction the
stock market expresses. and Is, to that extent.
an Indicator OF the condition OF the country.
or the prosperity Of our agriculturists our
mormon exports of their produce at higher
prices than have prevailed for years are suffi-
cient proof. Our iron mills and furnaces are
overwhelmed with orders, foreign as well as
domestic. The demand for manufactures OF
cotton has both raised the price Of the raw
material and set once more in operation facto-
ries which were idle. The merchants and re-
tail shop keepers who distribute commodities
among consumers are again busy. Vacant
buildings are beginning to find tenants. and.
consequently. real estate to find buyers, All
these influences increase the volume Of trad
ing and with ii the profits OF people engaged in
trade, A larger number of them have money
to sncnd. and in spending it enable those upon
whom it is spent to spend it in turn. This is
what's popularity called prosperity, and. at all
events. it dissipates the discomfort which ac-
companies the opposite state OF things.
Further proof Of the revival OF activity in
business Is furnished not only by the CONSOLE
dation OF numbers OF industrial CORPORATIONS,
OF which mention has already been made. but
by the formation OF new companies Of tho
same kind to dispute with them the patronage
OF the public. While the managers OF the old
consultations are confident Of getting bust
ness enough to keep all their machinery in
operation, their Inew rivals arc equally conf
dent that they, too. have before them n fruitful
field from which to harvest profits. 1t is not to
be supposed that they are investing their can't
tai in manufacturing plants from which they
can never recover It, unless they believed that
they can make 1t, in that form. productive. To
be sure. the annual rate of profit will be. for a
time. reduced by competition. but as the coun-
try grows and its power Of consump tion in
ornaCaa r,rn8fa will innraaSa with n