The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1899-04-11
EXPLAINS TIE BOON
Henry CIews Goes Into the
Economic History
OF THE SILVER AGITATION
Why the Recent Slump in
Stocks Is a Good Thing.
OF THE SILVER AGITATION

| New YorK, April 1O.-Henry CIeWS says.
| During the past week, there has been
an erratic change in the general aspect of
affairs in Wall street. In every respect.
/ the situation is an extraordinary one; and
! it has aspects which, taken altogether,
| produce a speculative spirit of extraor-
binary vigor. The general run Of expert
ence has been that, after an unusual rise
| in prices of securities, the controlling spec
ulative interests would sell out and use
their influence TO precipitate a material
decline. In the present campaign, we have
| had a reversal Of that experience. 1t is
| true, there has recently been extensive
realizing and not a little effort to break
! down prices, and that by some Of the
shrewdest operators. But, for once, there
has been an exception TO the almost uni
versal rule. Though the selling and the
bearing have been very active, prices
| have scarcely yielded to what hight have
been expected under the circumstances;
the market throughout has exhibited con-
siderable bottom strength. This has been
maintained too in The face of quite a strin-
gent and rigid discrimination in collat-
! eral securities in the money market, caused
by decline in the legal reserves Of the
banks and of higher rites in foreign ex-
! change.
1t is not generally fully realized to what
an extent the business of the country was
held in restraint by the grave uncertain
ties created by the silver agitation from
the year 1893 to the end of 1897. Capital
was alarmed and refused to go into perma-
certainty as to what should be the future
value of the dollar. The consequent alb
sence of new enterprises was of itself an
important source of industrial depression.
In all directions, there was a contraction
of conumption. Domestic expenses were
reductd; few industrial enterprises were
started; industrial plant was allowed 10
run on without needed repairs and with
few extensions; the same rule applied TO
public works generally; the railroads and
shipping deferred OUTLAWS for repairs and
requirements; congress and the legisla-
lures were compelled to restrain public
OUTLAWS within the narrowest limits posi-
bly,; and besides these influences tending
to the contraction of trade, financial insti-
tutions were moved by apprehension to
restrict their credit operations within the
narrowest limits. Then, for five years,
the business of the whodle country was
held in state of virtual paralysis. For
that period, the ordinary wants of seventy
millions of people were only partially sup
piled; and in that way a vast accumu-
lation of unsatisfied requirements was
postponed until public confidence was re-
stored. That restoration set in with the
J0fo g -.
the election Of a sound money president.
Then came year of abundant crops, with
the restoration of prosperity and good feel
ing in the agricultural west and south.
The year 1897 gave still more abundant
crops and a consequent unparalleled sur
plus of exports over imports with a gen
eral revival of business. This change of
conditions has brought orders into every
market. not only to satisfy the liberal
wants incident othe current general pros
perity, but also for the supply of the ac-
cumulated wants Of five successive years
of postponed consumption. The result of
this concurrence of circumstances we now
witness in a condition of national prosper
ity perhaps never equalled in any period
of our national history. In some of the
staple branches of manufacture the exist |
ing plant falls far below the demands of
consumption, and this situation seems /
likely to continue indefinitely
Along with this great commercial re-
vival, the five years aEc~ulation of idle |
capital has come into Wall street partly /
for investment and partly for temporary |
speculation. 1t was this demand. concen- |
trated largely upon dividend-paying |
stocks no
its upward Impulse; and to that same in
huence we owe in part the continued high /
prices; for as investors become more and I
more convinced of the probability Of per
cent being the standard return upon
sound securities. they become more will
ing to buy at the current high range Of
prices. There are. however. not few of
those who hesitate to invest at such a
low rate of return and are therefore Will
ing to accept a more or less speculative
element in their invest ments; which again
keeps up the derAnd for the second grade
of stocks, with the result of frequent rises
in one or another of that class of stocks.
The immense creation OF industrial com
binations also here comes in as an element
OF the investment demand. It is assumed
that among those issues there are those
that afford promise of unusually large
dividends, which are attracting perhaps
much larger buying than is generally sup
posed from men who are unprepared to
accept the current ,ew returns from older
and better known securities. Considering
the enormous amount of long idle capital
which has come into the market and the
extraordinary newborn activity in the in
dustrial stocks, little further Is needed to
explain the market which is now the won
der Of Wall street; nor, is il difficult 10
find reasons for expecting that this activ-
ity may continue for quite some time long
er. There can be no doubt that there is
an important investment demand stil in
the market; L may ne ceutering mainly
in second-ciass railroad stocks and The
more attractive indUstrials. but it never
theless constitutes a real bull" influence
which the pessimiSts feel compelled 10 re-
spect; when that demand has been sat
isfied. III eTnarket may take on different
aspect; but, for 50 long as It remains. We
are likely &c find bull influences in the
ascendant
The market. however. Is in & shane from
which wide fluctuations may be expected
Yesterday We had an Illustration II this
In sharp breakdown Of certain group Z
Of ind1stria.s. which extended lis effects
through the general list That break
should have come during the latter part or
March as I nroen1z-f --.7 IL --1s-r7- r,---