Evening journal., 1901-02-23
THEE. .MARKE rs
Letter on Stocks, Cntton, Grain, Pro-
visions
Special 10 tho Evening Journal.

market uuflnB me past week mas DG5n
reactionary. Last Saturdays state
mfnt of the associated banks was sol
Unexpectedly rnfavcTaDle that 1t pro-
duced a cautionary effect. the more sol
because the mood Of the stock market
was not sangulna enough 10 make
speculative holders Indifferent 10 thel
aspects OF the money market The
.sensitivencss CT money was also aggra-
waited by the uncertainty as to whether
some considerable loans might not bel
needed fer communicating the billion
dollar steel and iron combination.
Also, the market has showed plain
indications OF thedness in the specu
ative department. Experienced OPERA
tors have bdan en- the lockout for this
symptom OF a coming yielding in the
high tension to which the market has
so long b1n subject and the m~re
cautious holders have been free sellers
on the appearance CT this sign Of ccm-
ing reaction The market is so much
under the influence Of conflicting cur
rents and uncertain factors, that the
lcliques are becoming less aggressive
and are putting themselves on the de-
fensive. The vacillation in prices Of
certain stocks which have been under
vigorous manipulation plainly indi-
caiss a growing disposition to take in
sail, at least temporarily.
The very exceptionally low condition
of the bank reserves for this season Of
! the year. with no positive assurance
/ Of an early increase OF cash funds.
while 1t may not produce any general
or very positive Encouragement, dOes
hold bull" operations in check and in
duce postponements Of buying Among
certain cliques, there Is still a strong
undTtone OF expectancy, more quail
fled by moderation. however. than has
been the case in the earlier stages Of
the boom. Indeed it is doubtful
whether the larger professional opera
tors ara calculating upon any further
material advance in prices for the
lpresent. The more prudent would
probably be fully satisfied with a
market that would enable them to get
out of their very large holdings al
labout current figures; and 1t will not
be surprising If they are found to be
now quietly acting on that policy
lThey cannot afford to stand stlll in
lpresence OF successive lapses in prices
and spells of comparative dullness
land must either diminish their load by
Iselling. or increase it in the face OF
uncertain conditions and when prices
lare already unprecedentedly high And
lyet IL is no easy matter to realize on
iany liberal amounts of stock withOu'
producing a nervous condition of the
market and raising a rush to sell thai
might play havoc with "bull" inter.
ests. That, however, is not a coursi
of affairs that the managers of deals
desire; they may need money for con
F, summating their plans and above al
!, desire the maintenance of genera
buOyancy in the ranks of speculation
n This is not a very hopeful situation
. Il is at least one that calls for grea
y tact and skin Of management On tn
! one sida are immense speculative
/, holdings of stocks, fer which holder
would be glad to get current prices
and yet distrusting their ability to d,
. SO. On the other side. there ar
deals in process involving transfer
of hundreds Of millions of securities
= THE success of which is largely de
pendent on the ability of the specula
!, tors TO carry their loads on to get ril
- lof them without severe break II
% lprices. These two sets of interests arr
: mutually dependent on each other
= fCrbearance and support; and yet {
Is TO the manifest interest Of eacl
- large speculatOr OF clique to slip Gu
OF the market and leave cverybOd
= else to look after his own affairs in hi
own way. All this. too. in the face q
an unprOpihous money market an
with the banks by no means desirou
lof encouraging the existing infatiO
q land general Cver-strain in the marke
for securities. The longer such sit
IT uatiCn exists and is looked at, tn
q more certain It is to create a nervou
II market and to encourage realizing
=, Is undoubtedly true that. between tn
stupendous deals" and the magnitud
" lof the speculative boom, Wall gdrect
p Cverburdened with inflated cOmmil
.e ments. and any unforeseen spark {
II alarm from any quarter might easil
W excite caution among money lender
g, with very unwelcOme consequences.
s. The country has now had three su,
as cessive years of extraordinary fina1
s. cial activity and change. Within tn;
ii time, fully five milliards of consol
dated industrial securities have bee
ar issued, in place Of less than half thu
S. sum OF issues made by the original II
w dependent corporations and withol
50 any corresponding addition to Il
r. working plant of the country. In 9TH
b. words, the leading national industri
N have baen over-capltalized to the e.
S. tent Of more than double their orig
.; nal true valuation. In order, ther
nt fore for this class of investments
to maintain their former rate Of mark
IS value 1t will be necessary for d
N, plants TO make net earnings equal
double their former profits as separa
corporations. I venture no opinion
the question as to whether the co
IS soNdations can or will do this. {
ng that matter. it seems TO me. the tr
Us. business attitude is to regard tn
'ly great change as an experiment
MS which nothing is TO be taken for gran
lrt cd. but everything leat to be dete
m mined by the ascertained results
- Experience. The question, therefor
|. arises whether this very large pr
4 lportion of our Industrial wealth ha
Il ing been capitalized on such an extr
q Ordinary basis of imitation, it is pr
dent or safe 10 encourage further co
n solicitations, on like cond tions, un
y THE existing amalgamat.ons have del
onStrated their merits or dsmerits