Omaha daily bee., 1903-04-06
MORGAN INTERVIEW HELPS
Real situat'oR in the Stock Market is
Clearly Set Out BY him,
MONEY SHOULD SOON Be EASIER
No Strong Bull Market IL Possible,
However, Until the Securities
Held in Reserve Are All
DiHested.

NEW YORK, April 5.-(special)-Henry
Clews, In his weekly Wall street letter,
says:
The interview with Mr.. Morgan had a
decidedly beneficial effect. not SO much upon
values as in. fixing public attention upon a
rev facts that should not be overlooked
when the pendulum seems inclined to swing
towards unreasonable pessimism. He was
perfectly correct In saying that the bulk
Of undigested securities were in strong
hands; that there was no danger of their
being dislodged; that the banks were amply
protected, and that the country at large
wholesome that these facts should have
the Impress OF authority upon them, in
apprehension from so prolonged a decline,
but there the effect of the interview seemed
to end and the market while since steadier
has shown no disposition to advance.
What are the real reasons for present
hesitation in the stock market? They are
these:
/. The actual scarcity and consequent high
rates of money.
2. The small returns upon good securities
compared with current interest rates.
3. The large supply Of undesirable securi-
ties awaiting a market.
L. Large pending issues of good securities
that Will be offered at the first opportunity.
8. The bitter rivalry created by such con-
tests as the Southern-Union Pacific and
other disquieting controversies.
A genuine buoyant bull market seems i'm
possible in the face of sub conditions; still
good rallies ought to follow the extreme
ueclines. because the general financial stu
alton is sound, and because many of these
conditions have already been freely dis
counted.
Money May Be Easier.
While the money market is still the most
immediate adverse element. the furry in
call loans should soon be at an end, the
demands incidental to April l having been
met, It is satisfactory to note, without
disaster, Funds thus withdrawn should
soon return to the banks, and from the
middle of April until preparations for the
crop movement are In order there should
is held within ordinary bound 1t would
be a mistake, however. to expect very easy
rates. Regular commercial and manufac-
turing demands are sure to be heavy. and
the banks are likely to give these first
consideration. Moreover, large sums are
still under the control of strong borrowers.
who are abundantly able to resist liquida-
ton when they so desire. Consequently,
apart from government operations It is
quite certain that there will be a good de-
| mand for money until the close of the year.
There is still another consideration affect
Ing the future of the money market, and
being short lived because of the immense
volume of new securities of a good charac-
ter that would quickly, be created II the
money market permitted. II is known that
our leading railroads contemplate the ex-
penditure of enormous sums for improve
ments, which can no Longer be met out of
earnings, but must be provided for through
new capital creationL. 1t is certain that,
as a result, we will have very unusual
additions to the security markets during
the next year or two, to say nothing of
municipal. state and government issues for
important amounts that are known to be
forthcoming.
No strong Bull Market
In the face of such facts it is going to be
very difficult II not impossible to create
bull markets on the scale witnessed in 1906
and 1901. On the contrary we are more
likely to see a downward drift, interspersed
of course, with recoveries of considerable
duration. We are fully entitled to one of
these recoveries now before the summer
fairly begins. Stock exchange values have
undergone a very heavy shrinkage. i'm
proved conditions in the money market are
In sight, the crop outlook Is favorable, the
farmers and Industrial classes are highly
prosperous. production has not yet over
taken consumption. great development Is
going along in the west, railroad earnings
continue heavy, our exports are large, our
credit abroad Is ~unimpaired and everything
points to continued trade activity for an
other season at least. The two main Dth-
culties to further progress are the con-
gested condition of the money and security
| markets and the excessive increase in costs
of production among manufacturers. II
any reimbursement of these conditions can
be effected we nay look for uninterrupted
prosperity. Some sort of REIMBURSEMENT Is
Imperative. for Wall street is suffering
acutely from an overdose OF securities and
Industry from too many strikes.
AS to the immediate future. that Will be
| largely governed by monetary conditions,
which fortunately show signs OF improve
ment. Funds are already beginning to re-
turn from the interior, and should this con-
tinue. as is probable, easier rates Will pre-
vail. This cannot but induce a more active
and stronger market for a period at least,
SO that stocks bought on concessions from
present prices should prove profitable be-
yond much doubt.