The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1899-02-20
views of Henry CIews.

Views of Henry CleWs.
Banker Cews, of New York, in his fnan-
cial circular of Feb. Is, says: 1.-The inter
vention of two days holiday and the inter
ruption caused by the extraordinary storm,
nave somewhat cooled the speculative en-
thusiasm and afforded Wall street an OPP
portunity for reflection, which may not be
without some advantage; the more so be-
cause the situation in hnancia affairs is an
unprecedented one and imperfectly under
stood. Among its numerous causes are %
an unparalleled abundance of capital seek
ing investment, after a long period Of idle
ness consequent upon d%istrust; () a large
floating surplus of business earnings which,
for the time being, is being enthusiastically
devoted to speculative uses; 80 large
amounts of securities have long been ac-
cummulating in the hands of speculative
dispose of to the public; % many new en-
terprises are seeking capital, after waiting
long for an opportunity; Co the large earn.
ingS Of the railroads are placing many OF
them in what is taken to be a permanent
dividend-paying p%osition; CO. financial opln-
ion has come to the conclusion that, in the
future, capital must accept lower rates of
interest, which implies a higher market
price for the principal; and % enormous
amounts of corporate and private industrial
capital are being consolidated in the ex-
pectation of cutting down expenses and
realizing larger returns from the invest
Never before has such a combination of
powerful influences occurred at the same
moment in this country; They are real fac
tors and easy of comprehension; and as they
all have a bullish tendency, 1t is not diff
cult to conceive how they have produced
the very marked effects on values that have
occurred; nor is 1t to be supposed that
effects accruing from such influential causes
will quickly disappear. The change in the
tone of the market has taken such a strong
hold upon opinion, that nothing short of
some unforeseen calamity could be expected
to put prices back to the old-time level. 1t
t. -1A-1 Nhn NncEihln fh0f fharR nav hn a
revision of some of the more extreme adj
Vances. The mood of some of the large
operators is tending in that direction, and
all the more so because they have already
made large realiZations and would welcome
an opportunity for buying back at lower
figures. There Is, however, one rather I'M
portant element which tends to counteract
that drift. l refer to the considerable mass
of medium and low grade stocks the rise
on which has not been at all proportioned
to that which has occurred upon the better
grades. Perhaps these securities have not
yet been suflclently crealted WIN tnS oene-
fits accruing from certain OF the influences
referred to above; and 1t seems reasonable
that the causes which have led to such a
great appreciation in the gilt-edge invest
ments should be regarded as also comforting
a pro rata additional value upon stocks OF
inferior grade. 1t is a feature of the great
rise, however, that it has favored the in
vestment securities rather than the specula-
tive; and any effort to manipulate the lat
ter is now having to contend with a reac-
tionary tendency in the former. ms pro-
duces, for the moment an uncertain ana
hesitating market, not encouraging to In
discriminatory buying and long holdings,
but rather to short turns, buying on the
drops and realizing on moderate advances
wal street is not Indifferent to the i'm
mense current creations OF trust issues. II
is felt to be a movement OF the protoundeSt
importance: but opinions about outcome
vary according to the theoretic standpoint
from which the subject is viewed. For the
moment it is regarded as affecting Wall
street interests rather indirectly than d.
rectly. that is TO say, only so far as 1t may
possibly unsettle confidence IN the somewhat
distant future of our industrial system;
even the question as to whether these new
issues will broaden the speculative list OF
the exchange Is not viewed as a matter OF
Immediate interest. In considering that
prospective question it is to be kept in mind
that these trust operations are not,
properly speaking, new creations; they are
rather the reshaping of old capitals, so that
the movement is to be regarded as only IN
a limited sense an expansion of corporate
capital. The new consolidated issues are,
however. much more adapted for great
speculative operations than those theX dis
place; and the large extent to which the
other industrials are now dealt in on the
exchange affords some idea of what may be
the later magnitude OF these operations
should the Stock Exchange decide in favor
Of admitting the stocks to a free participa-
ton in it's privileges. That is the question
which, at the moment; most directly con
Germs members of the board and which, at
a later stage. may excite unusual interest,
if not wide ~divergences of opinion.
The excess of exports over imports Tor
the eight months ending Jan. 81 amounts to
$439. $40. 900. This excellent showing together
with that of the New York banks, which
represents an increase in deposits for about
the same period Of over 5000. O00, 900, has
made II possible for this country to take
from Europe SOS, 100000 Of our securities
since the first of January without any ev-
idence Of discomfort or fatigue; and, as
an evidence that this increase in the New
York bank deposits is not at the expense
Of other sections of this country. money
everywhere at all centers is quite as super
abundant as II Is in New York city. 1t
goes without saying that the entire circulat-
ing medium to-day in gold. silver and pa
per is seeking active use in securities and
sound financial enterprises, thus showing
the existence of full confidence prevailing
from one end of the Nation to the other in
the soundneSs of the business situation.
When confidence is strong everybody that
has money Is anxious 10 place 1t where ii
will bring interest and dividend returns.
When there is a lack of confidence the uni
versal feeling is to lock up principal and
sacrifice the interest. This is boarding and
always produce scarce money and high
rates for its use. At the present time COM
petition is with the loaners of money, they
wing with each other to make the best
use OF it. When there is no confidence the
competition is with borrowers. who are
compelled to pay whatever is asked for its
use"
Saturdays Bank Clearings.