The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1902-01-13
BEST TO BE CAUTIOUS
HENRY CLEWs THINKS PRESENT
PROSPEROUS CONDITIONS ARE
ABNORMAL
CURRENCY REFORM NEEDED
Absence Of More Elastic Monetary
System Increases Danger of
Panic in Case of Retrench-
Ipent and Disaster.

In his weekly Wall street letter Henry
Clews sounds a note of warning against
CNefcontideace in the continuance of the
present prosperity which, in his judg-
ment, is abnormal He says:
Conflicting influences have Kept the
Sloch market fairly active and irregular,
alofQl9 excellent opportunities to the
professional trader. Opinion is not 50
0ptlmlsucaHy one-Sided as a wear ago
InG facts that prices are very high and
that the maintenance of present fnf1atioy1
IS only through unexpected continuance
OF prosperity, are becoming gene. lily
recognized and inducing growing spirit
OF conservatism. When stock EXCHANGE.
transactions have risen from $4,000 05C
shares in 1856 to 253, 600, QUO in 1901 it seems
t3ne 10 call a matt for reflection. During
that same period many of the active
stocks nave more than doubled in value;
bank loans in New York have risen from
$iGheg0W0 to $S75000,0G0; pig iron produc
lipn has doubledi our exports have risen
over Az per cent and imports nearly 80
per cent; while the prices of staple com
niodjtles average one-third higher than
IN 1871. Such extraordinary prosperity
Is, OF course, highly self-sa tisfying; but
It's altogether exceptional character
throws the strongest doubt upon it's high
level permanence. Not a few men whose
judgment is entitled to respect believe
tha6 the present rush OF business and
traflc Will contlue another year. No
ocdy WISHES to disagree with them and
Everyone Will hope their views may prove
correct; yet facts cannot be ignored, and
these point Enthusiastically towards reae-
ton, Notwithstanding there are quarters
III Which the onward movement may con-
tlnue or break out afreSh in spots hitheI-
to neglected. There is, for instance,
strong evidence OF a boom in real estate,
which is Invariably sought for invest
ment when other fields have lost their at
| fractions, but such operations have al
ways marked the elimination of an Amer
| lean boom"
The two most likely starting points of
reaction will be contraction by the banks,
arc the influence of competition. OF the
former there is no indication as vet ex-
cept that banks are becoming more eau
/ c0uS lenders since the recent practical
failures Of two or three large Industrial
enterprises. Fortunately the monetary
outlook is satisfactory, and nothing will
Go more towards keeping US in a sound
and prosperous condition than wise re.
stralnt on the part of the banks IN
CHANTING credit. The country is still m
need Of scientific and elastic currency
system; the absence of which vastly in
ceases the danger of panic in times
of retTenchment and disaster. But con-
gress sleeps; forgetful that the promise
Of two national elections to provide a
sound currency system are still unful
nlied: What 4 the country should fail
u give the party in power a third chance
to redeem ante-election pledges?
New competition is growing with SufIi-
clcnt rapidly to be factor in the indus.
trial shares. New plants and enlarge
mCnts are beihg constantly started and
others projected. AT present the demand
LOT cOnmOIltleS seems sufficiently active
to keep all establishments fully employ
ed: but price concessions are being made
and coming reports are likely to make
less favorable balance sheets than last
year The statement of the United
States Steel COZ pOration, though a good
one, was not so satisfactory as ex-
pCcted.
Railroad earnings continue very flattcr-
ms. and this i'll spite of a falling off in
the grain movement at the West. Gen
cTal traffc IS still exceedingly heavy, and
railroad officials appear confident of its
continuance. The coal trade is in ex-
cellent condition, demand being heavy
and prices high. The increase, however,
III Jersey Central dividend from 5 to
Pc cent saVOred more of stock specula-
tion in behalf of Reading than good rail
TO2u manag gem ent. Such strength as
the market has lately shown was entirely
GUe to powerful manipulation aided by
easy mohey. Rising bank reserves are
to be expected for some time to coma
and as the big leaders are all necessarily
enlisted on the long side, having stocks
in abundance to sell, it is quite prob
able that in the absence of unfaVora BILE
rcWS we may expect a continued manipu-
lated, active market. The greater the
advance from the present prices, how
ever, the greater the feverishneSs and
seTsltiVenesS to unfaVorable news. There
arc not few operators who are now
openly faVoring a higher market in order
to secure a safer basis for selling later
On. In any even the market will require
close watching. and I can only repeat
OF: all the pronounced advances hereafter.