The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1899-06-26
STATE OF REACTION
NEW YORK STOCK MARKET UN-
DERGOING THE TEST of SUM-
MER DULLNEss
RAILWAY SECURITIES SOUND
Apart From the Laxgeness OF Cur
rent Earnings the Discipline of
Unfettered Competition Is Hav-
ing q Wholesome Eject In the
Way OF Economising Manage
=. ment.

Way OF Economining Manage
ment.
NEW YORK. June A.-Henry Clews'
weekly stock letter says: Wall street is
gradually drifting into the season OF rec
| rcation and absences, and there seems to
be little reason to expect any important
exception from the quiet that usually pre-
walls during the very hot weather period
| of the summer. The many operators who
| have made exceptional profits during the
| last few months will be apt to court re-
| lief from a long strain of excitements
| which have not often been equaled In
| the history of speculation; and the pos:
| ton OF the market presents no particular
Inducements 10 them to foccso the Gle
| sired rest.
| There has been steady process Of real
| izing for some weeks, and affairs APP
| pear to be still, more or less, in state
| of reaction; and this produces DISPOSE
| ton among leaders to let the present
/ drift take its course and walt until a
| more stable basis has been reached. In
| some quarters, 1t has been thought that
| the new speculative interest, developed by
the large creations of industrial consoli-
dations, would probably make an effort
| to revive the bull feeling with view to
| protecting special properties. And opera
| lions during the earlier half of the month
appeared to indicate that an experiment
! in that direction was being made3 but
| results have shown that there is little
present disposition among outside. opera
| tors to participate in any such SIDE cam
paigns.
The movement fell fiat; a slight advance
| in prices brought out more sellers than
| buyers; prices therefore steadily declined,
and the small volume of transactions
shows a predominant disposition to leave
| the market to find natural bottom I'M
| der the test of the summer dizziness and
| the manipulation of the professional
| bears. And there are seasons which may
| easily dispose conservative operators to
such a course There has undoubtedly
| been a great deal of extravagant specula-
ton; impossible expectations have been
/ encouraged; considerable fall In
prices from the top figures has
| occurred, which has discouraged
| Introduction of the vast new issues of
| industrials has brought a new and In
| fluential element into the market the eff
| feet of which cannot yet be foreseens
| and. in view Of the strained condition of
| the foreign banks, especially of the Bank
| of England and the Reichsbank, 1t Is not
| certain whether we may not have to face
| further returns of our securities from Eu.
rope in addition to the net ref1ux, esti-
| mated at $3.50 900, 900, that has occurred
within the last eighteen months. Besides,
| without at all questioning the reasons
which have induced so many OF our In
+ dustrials to consolidate their interests, 1t
| is not to be overlooked that there Is a
| large and important class who entertain
very opposite expectations as to these
| new investments-which is phase of
sentiment not favorable to eliciting out.
! side participation in bull movements.
Indeed, in many ways, the powerful Dull
| tendencies that naturally attend the ex-
| traordinary revival in our national trade
are subject to certain amount OF coun-
teraction from series of conditions en-
| tirely new to our experience and yet OF
far-reaching interest and influence. Com
| ing concurrently with the reaction from
| an extraordinary speculative excitement,
/ 1t is natural enough that these new ele-
| ments in the situation should arrest at
| tention, produce some postponement of
operations and incline cautious operators
at least to a policy of waiting. In view
| of these general conditions it is not diff
| cult to account for the comparative stag
nancy that is steadily coming over the
| market, and the absenteeism of operators
| incident to the season can only be eX-
| pected to give force to this tendency OF
affairs.
| But while the conditions and forecast
| ings above referred to are not to be over
|
| securities market, there is limit to the
extent to which their influence is likely to
| be felt. In some measure, these factors
| have been already felt. The chilly days
| on the stock exchange to which we are
| becoming accustomed mean that atten-
| tien is being occupied with these self
| same matters; but it takes clear head
and cool one to see the end of set OF
| new and perplexing conditions This pre-
| however helms
| force of any apprehension which the new
| conditions may excite. Moreover, due
| weight must be given to the fact that, sc
| far as respects railroad securities. the
| market has an undeniably sound bottom
| Apart from the largeness of the current
earnings of the roads, there is ample evil
| dence that the discipline of unfettered
| competition is having a wholesome effect
| in the way of economiZing management
A recently published comparison of the
| business OF twelve leading companies fol
1898, as compared with the banner yeal
1892, shows that while the passenger earn
ings fell off II per cent and the freight il
| per cent, yet the working expenses were
| reduced 80 per cent, SO that the net earn
ings exhibited an increase of 5.8 per cent
| A decrease in working expenses and ar
| increase in net earnings In spite of a re-
duction of gross earnings, these are facts
which imply improved management anc
! as a consequence improved investments.
Thase are encouraging Indications thai
the apparent hopelessness of finding {
way to regulating railroad competition
does not necessarily carry with 1t the i'm
| pairment of working profits. Experience
| IS demonstrating that the railroads, takeT
| as whole, may be incI easing their divi
| dend-payirg capacity in the face of the
most reckless cutting Of rates. Evidently
our railroad system is reaching a posi-
ioIa &C.
over the reckless financing upon which Il
was originally founded, and is becoming
one of our best and most stable sources
| of investment. In proportion as this
| change comes to be understood and ap.
| preciated, railroad stocks will rise to 6
range of prices paralleling the quotation.
| for their bonds. The perception of this
| change lies at the basis Of that growing
| stability of value which gives to the mar
| ket for railroad stocks such an intrinsic
| strength under the. most trying condi-
| tons; and this factor may be trusted tC
| give support to the general market
against possible testing conditions arising
| from the new influences indicated above
| The continuance of gold exports-S3 800
600 having been engaged for shipment
| during the week-shows that the specie
| wants Of the European banks have no,
| been satisfied by the previous remit
tances Of T,500,000. The unusual lowness
| OF the reserves of the Bank of England
| appears to be the main cause of the move
ment Only twice, within the last fifteen
| years, has the reserve been 80 low In June
as 1t is now. The bank might. under
more assuring circumstances. have
worked itself into a stronger position
| gradually; but with the threa tenin9 CON
| ditions in the Transvaal and in France
and It's liability to be called upon for gold
IN connection with foreign loans, the
| management seems to have no recourse
but to get geld by purchase in foreign
markets; and this appears to be the ex-