The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1901-05-20
GOSSIP Of WALL STREET.
QUICK RETURNS TO HIGHER
PRICES PREDICTED FOR IN
MEDIATE FUTURE
SECRET OF RECENT STRENGTH
Purchase of Controlling Interests I'm
Some of the Great Railroad
Properties Tells the
Whole Story

NEW YORK, May B.-(Speclal )-tfen-
~ C1ews, in his weekly financial review,
SAYS:
1 am disposed to believe that the break
OF last week will prove only temporary
and be followed by quick return to
higher prices, but not the highest ante
panic level. We are now able to under
stand the chief cause of the persistent
and eXtravagant rise of prices. The pro-
tracted extraordinary strength of the
market was not due to mere over
valuation of factors intrinsic to the i'm
proving traffic of the railroads. AS
matter of fact, the prevailing feeling did
no doubt overvalue that factor; but we
now see what was very imperfectly COM
pretended before-the immense magni-
tude of the operations of millionaires
who were secretly buying controlling in
terests in four or five great railroads.
without regard to the Intrinsic value or
the properties. Had this been known to
be in process, it would have alarmed
the market and produced general reaiiZ-
ing; that enormous buying and contlnO-
Gus rising, however, were construed as
within the ordinary lines of speculation
and therefore as really express ng the
speculative strength of the situation
apart from any special outside stimulus.
The Northern Pacific corner has re-
Vealed the true source of the great rise
in the stocks in which there had been big
deals" and suddenly the street aWoke
to the fact that it had been misled into
eNtravagant buying by unsupported and
dangerous ventures, and had become IN
VOWED IN an imitation OF alarming 1ndBHl-
tude. THIS undeceiving of eXtravagant
expectations has alarmed the whole
speculative community and driven them
into realizing. with the result of the
fall in prices which the past week wit
messed; and the lesson of moderation
which recent events have taught is likely
to be remembered for some time TO
come and chasten the tone Of specula-
ton.
The situation created by the violent
competition for the control of the North
ern Pacific has now abated, and the
struggle Is no longer likely to develop
any deranging conflict: and the same
may De taken for granted in respect to
other stocks more or less concerned with
current railroad deals" Moreover, the
transactions in these stocks, having
been well eliminated from the general
speculation, are likely, to remain for
salxen until the deals" have reached a
final settlement This clearing up Of
the situation opens the way to a re-
sumption Of speculation in otner securi-
spirit and activity as heretofore The
general market has received a shock
which will likely be felt for some time
TO come There has been a large eX-
tent of compulsory realizing in which
some operators have lost their accumu-
lated profits or exhausted their margins.
ton. the losses have been especially
large, ana the contingent of outsiders
has either been driven or frightened out
of the market The Western specula-
tors have had to liqudate on large
scale. They and even more cautious
operators have learned a lesson which is
calculated to restrain them from buying
at top prices. Also, it is to be expected.
that this same class will hesitate to enter
the market again until the rough places
in the railroad deals have been made
smooth. Moreover. when market mas
been severely shocked in the midst of
sanguine BOOM 1t takes time to entirely
restore confidence; and that is especially
the case when the disruption comes on
the eve of the summer vacation, when the
speculative fraternity are worn out with
months of excitement and over-tension.
The situation. however, has another side
that merits much consideration. The
crisis Of the danger is passed. we have
seen the worst, and it is felt to be a
great relief that the consequences have
not been more serious. Not one stock
exchange house has suspended, which i'm
plies that operators have, from their
large profits, been we'll able to take care
of their contracts. This is, perhaps, one
of the most gratifying experiences in the
history of Wall street ispeculationS. The
perils of the Northern Pacific corner"
TO London seem to have been almost
equal to those that threatened New York
The joint Intervention of the Rothschilds
and Mr.. Morgan appears however. to
have aveTted the danger and the Lon
don market has again recovered tone.
During the past week there has been
pretty thorough wedding out of en-
fieebled S9perators; the bargain hunters
have taken off considerable floating
stock into their strong boxes and the
market is thus working into sounder
position. Whilst there has no doubt
been cons 'dCrable clearing cut of the
weaker elements, yet there remains an
important class OF operators Of large
means who baVe confidence in the stay
ing qualities of the market and look for
the maintenance Of activity through the
summer months. They regard the I'M
DERIVING conditions as essentially strong;
and. while cOnccdiug the transient ef-
fects Of the past shock and in no dispo-
s si TO PR maturely force up prices,
they yet regard the workings OF the
railroad deals as destined to produce
permanent elevation in the value of that
class of securities; thus the very causes
that nave temporarily overthrow the
market are looked to for a Widespread
consolidation cf out investment interests.
Another fact not to be left out of ca
O. culationS is that the securities of the
largest corporation in the world have
Deen submitted to q severe test very
early in their existence, and have evil
oenced recuperative powers that ought
to allay any apprehension
Fortunately, the shock in Wall street
mas scarcely had momeptarY effect
upon industrial and commercial interests.
Inc harvest prospects are encouraging
ana the South and West still maintain
lhelr extraordinary prosperity Credit
operations are in a sound and healthy
condition. The money market though
subject 10 n healthy demand, is backed
by unprecedented loanaple sresaurces
tor the mom1 Mt gold is going to Eirope,
not, however from any adverse com
mCrcial movement. but rather on account
or exchange operations tending to place
American balances at the service of for
egn markets The April report Of the
bureau of statistics shows q continue d
increase in exports and the total f1reigI
trade of the fiscal year 19G0-0f is expect-
ed to show an excess of exports ov,r
imports amounting to S7O0eI0, c0J-the
lergest ere litar balance in the history of
our foreign commerce.