The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1903-06-01
MARKET is STRONG
IN SPITE OF The
BREAKS
71T-E 20
- 81
Henry Clews. Points That
Apparent Weakness Comes
From Caution Caused by
Overlooking IF the Market
With New Securities-No
Possibilityof Panic.

Special to The Globe
NEW YORK, May 31-Renewed
liquidation again unsettled values on
the Stock Exchange and further post
poned recovery. Tuesdays and Thurs
days breaks in the absence of fayora-
BILE news were a surprise and naturally
inspired fresh caution among those OPP
timisticaIly inclined. Several very
plausible theories were offered in ex-
planation; but whatever truth there
may have been in these the true reas-
on lies back of them in the inevitable
reaction following the excessive infla-
ton which eliminated in 1902. 1t is
perfectly true that the financial stu
alton is much stronger than six months
ago; that liquidation has already been
severe; that business and general in
duStry continue on an active scale:
that the crop outlook is fairly salts
factory, and that there Is no occasion
for alarm. All these things must be
admitted; but, on the other hand, there
is still a big mass Of securities over
hanging the market rand seeking buy
ers. Some of these stocks are held
by strong men, perfectly able to abide
their own time for selling, while con-
siderable amounts have been locked up
in syndicateS OF pools which must ex-
pire and Hquidate. In some instances
these new creations have been held by
rich but inexperienced operators until
sheer exhaustion has forced them to
sell.
Too Many Securities.
Not only is the present supply of
securities greater than the market is
capable of absorbing, but at this awk-
ward juncture, we are treated to an
enormous increase. IN the supply. The
Pennsylvania has recently announced
an issue of $75, 00e, 900, and it is known
that other leading railroad systems
are contemplating heavy issues made
imperative by the urgent demands for
improved transportation. These new
securities Of standard corporations are
sure of a market at a price, and as long
as public buying power is limited they
force the selling of less desirable Sc
,curities. Moreover, the financing of
these operations involves large sums
Of money; and though there is no i'm
mediate scarcity of funds, still the in
elastic condition of our currency sys-
TENS necessitates policy of extreme
caution if we are to escape difficulties
when the autumn crop and business
demands are at high level
Next month government receipts are
likely to considerably exceed expendi-
lures, so further absorption by the
treasury may be looked for, possibly
obliging Secretary Shaw to take fur
Their steps for counteracting the i'll ef-
feet OF government operations.
Other Bear Influences.
These are some Of the more distant
influences that will have to be consfd-
cred. The more immediate cause of
recent declines seems to have been the
forced liquidation of some of the newer
hnanciers who had rapidly accumulated
large fortunes and embarked in a
series of questionable ventures, which
the underlying conditions just refer
red to have simply brought to a crisis.
Unquestionably the market will be
much improved and strengthened when
these elements of weakness are Grad
icated, but until they have been values
are likely ii be unsettled and may drift
to still lower basis. There is no occa-
sion to fear panic, simply because
the material for panic is not in sight.
Business continues on large scale
and lower range of prices for both
commodities and securities should be
reason for strengthening, not i'm
pairing, confidence. 1t is remarkable
that so extensive a decline as that wit
messed in the last six months should
be endured without disaster. Stocks
are steadily passing from weak into
strong hands, many good securities
have Shrunk 20 to 40 points and over,
and when liquidation has run it's
course there will be only these OBJ
stacles to a good recovery, viz, the
crop, money and labor situations.
At present there is more or less per-
plexity regarding all three The agri-
cultural outlook has been materially
affected by the unusual backwardness
OF the season, increasing the danger
to corn and cotton from frost, and the
industrial outlook is still unsettled by
labor agitation. Under these circum-
stances We can only advise continued
spirit of caution. While there are
many reasons for looking on the hope
full side of affairs, there are others in
dicating that a still lower level, ac-
companied by sharp reactions, may be