The Indianapolis journal., 1899-01-23
VIEWS or HENRY CLEWS


Henry Clews, in his weekly New York
financial letter. says: THE stock market
continues to show a high range of activity,
and in spite of the persistent efforts Of
room traders to break prices, strength has
been the preponderatng feature in nearly
every class Of securities. This is more than
has been expected in some quarters. There
have been, and still are, cautious people
who think that, as rule, prices have risen
pretty near to the danger point; and there
are others who think that is true of a linn
tied but important range of stocks. Some
of these have become sellers and more
have taken a waiting attitude, expecting
and predicting good break in the market.
This, however, has not happened.
THE failure of these expectations is in
some measure due to these judgments haV
ing been based upon experiences of the sort
of market we have had for past number
of years, lacking staying power and being
backed by faltering and feeble outside
support 1t is not To be overlooked, how
ever, that the position of the market now
includes elements of strength such as has
not existed for many years. Rarely, in the
experience of Wall street, have we wit
messed a situation so strongly favorng the
buying of securities. All the elements that
have excited distrust for years have dis
appeared, and the country is universally
believed to be entering upon an era of pros
These estimates of national prosperity are
not mere dreams of Sanguine spectators
they are accepted by the soberest minds and
are demonstrated by an unbroken array of
statistical evidence; and the continued eX-
traordinary earnings OF the railroads are
conclusive proof of the great activity of
general trade Beyond these considerations.
1t is to be noted that an extraordinary
amount of funds, representing the earnings
of this prosperity, is continually accumu-
lating in Wall street, and seeking employ
ment either in permanent investment or
transient speculation. This element also ex-
ceedS all precedent. We have thus wholly
extraordinary accumulation of elements
conducive to high prices for securities.
This estimate of the elements affecting
the market Is almost universally admitted
on the Stock Exchange. But there are
those who say: admitting all this, 1t is
not to be forgotten that prices have already
responded to these favorable conditions and
quotations are now high enough and, in
some notable cases, too high. This may be
true or it may not. Much depends on the
such conditions as existed say in 1897 and
part of 1898. this estimate is not to be ques-
toned But If our verdict is to be based
upon the conditions affecting values at the
present moment there is much less room
for such a conclusion. In the presence of
the unqueStioning confidence that now
exists and of the eXuberant hopes that pre-
vail on every hand, operators are prepared
to form expectations and to take risks
which they would decline under ordinary
conditions; and therefore 1t does not follow
that, because prices are as high now as
they were at the top of the bull move
ment in the fall of 1897 they are therefore
dangerously inflated and may burst at any
moment. 1t is to be counted as certainty
that. with the present great abundance of
outside means in the market and with the
extraordinarily sanguine tone of feeling
that exists among operators great and
small and also with the assured prospective
ease in money, the high water mark of 1889
will not correspond with that of any year
during the last decade With such a san
guine feeling now exists. there is no lit
tie probability that speculation may run be-
yond normal limits and prices materially
exceed intrinsic values. From a practical
standpoint, the question is not So much
whether prices ought to go higher. as
whether, under such spirit of speculative
elation as now exists, they can be prevented
from going higher. This, It seems 70 me,