The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1903-06-15
LIQUIDATIONC GOES ON
BUT NO ONE KNOWS
THE CAUSE
Mysterious PersistenCy in the
Sale of Stocks Only Attrib-
utable to Universal Caution
and Extreme Pessimism---
Market Conditions Otherwise
Improved.
Special to The Globe.

Special to The Globe
NEW YORK, June 14.-Liquidatton
has continued upon a most remark
able and mysterious scale. No author
itative explanation has yet been put
forth except that bankers are now
Withholding their support from ques-
tiOnable schemes, that many under
writing operations recently Organized
have been quietly closed in conse-
Quence, and that heavy capitalists may
have taken advantage Of the situation
to further important financial opera
lions. Whether these theories be cor
rect or not, it is plain the market has
suffered very largely under a severe re-
verse action from the speculative un-
derwriting mania of the last three
years. Good stocks have been sold to
protect the WeaklingS. There is ap-
parently nothing in the crop, money
or labor situations to warrant such a
fall as we have recently experienced.
Many good railroad stocks are now on
a per cent basis, compared with
per cent a year ago, and this at a time
when there is no likelihood Of de-
creased dividends, but in some in
stances prospect of larger returns. Nor
can can the decline be attributed to
change OF sentiment alone. Unreason-
able optimism has given way to uni
Versal caution, but extreme pessimiSm
is only occasional and is fully counter
balanced by those who recognize the
Improvement which has taken place in
intrinsic conditions. The only salts
factory explanation, therefore, for this
decline is the forced liquidation of
class of over confident operators whose
ineXperience and suddenly acquired
wealth had led them into unsound en-
terprises, which have quickly come to
an improbable end. How far the mar
ket has been Influenced by prepara-
lions Of financing important finan-
cial operations, such as the new issue
of Pennsylvania stock, it is impossible
to determine; nor is there any GER
tainty about the rumors of an effort to
shift control Of Pennsylvania stock.
If true, it is quite possible that advan-
tage would be taken of the present
situation to further such operations;
yet these rumors lack authenticity or
even probability.
Other Conditions Improve.
Aside from the purely speculative
situation market conditions have GER
datiOn. According to the ordinary
standards of judgment, unfavorable in
fuences have been amply discounted
and the favorable elements are tenn
pOrarily overlooked. The two most ad-
verse features in the general situation
are the crop outlook and labor diff
cultieS. AS for the crops, the worst
than can be said is they are late and
condition is cOrrespOndingly poor.
There has been too much rain in the
West and too little in the East. In the
West, however, the damage has been
confined to lands bordering the rivers,
and it is to be remembered that foods
never cause a famine, but usually leave
the soil much enriched. The drought
seems likely to result in a scarcity Of
hay and fodder in the East though
this loss is easily compensated for in
other directions, and it is noticeable
that no serious complaints are coming
from farmers since the drought was
relieved. One thing we are sure Of
and that is a good wheat crop and
good prices for the same. For corn
the outlook is anything but satisfac-
tory though favorable weather during
the next two months would do much
TO offset present backward conditions.
Cotton is also late and in poor condi-
ton, but the latter has probably been
exaggerated, While acreage shows a
considerable increase; moreover. the
PROBABILITY Of high prices continuing
until reserves begin to grow again.
means season Of exceptional pros
perlty TO Southern planters.
Strikes Decline.
While the injury to crops has nroha-
bly, reached the worst, the labor sit1I-
alton also seems to have reached a
climax. Strikes are on the decline
and indications are that under more
careful and prudent leadership labor
in the future will avoid some of tha
mistakes of the past. The most inter
esting question in this respect is. how
will business and industry stand the
new tax imposed by higher wages? 1t
is quite certain that costs Of produce
ton have been considerably increased
by the high wages and short hours
now in force
This means continued high prices for
all manufactured articles and possibly
still further advances If mills and fac
tories cannot obtain adequate profits
under present conditions. Will consun-
ers pay higher prices, or has the limit
OF their buying power at this level
been reached? In many cases IT has
been reached, and consumers are con-
sequently obliged to either buy less or
seek substitutes. Organized labor
though exceptionally well paid, forms
only portion of the entire population.
and a good many laboring men have
impaired their purchasing power bv
strikes and self-imposed tdleness. This
situation is fully appreciated by the
: mercantile classes, who are pursuing
very conservative course until they
see how the crop, the financial and tbe
labor issues are likely to develop dur
ing the next two months. While there
IS much ground for hopefulness in
these respects there is also much rea-
son for caution, and prudent business
men are acting accordingly The cot
ton situation Is certainly an element Of