Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1903-06-01
Forced Liquidation of Newer
FinancieFs an Element Of
Weakness In Market
SUPPLY OF SECURITIES GREAT
Not Only Is the Market Incapable of
Absorbing Them, But 1t Is Treated to
an Enormous Increase in the Supply
No Occasion to Fear Panic, How
ever.

New York. June Henry Clews i,
his weekly financial letter says:
Renewed liquidation again unsettled
values on the Stock Exchange and fur.
Their postponed recovery. Tuesday:
and Thursdays breaks in the absence
of unfavorable news were surprise
and naturally inspired fresh caution
among those enthusiastically inclined
Several very plausible theories were
offered in explanation; but whatever
truth there may have been in these
the true reason lies back of them in
the inevitable reaction following the
| excessive imitation which eliminated in
1902. 1t is perfectly true that the finan-
cial situation is much stronger than
six months ago; that liquidation has
already been severe; that business and
general industry continue on an active
SCALE that the crop outlook is fairly
| satisfactory, and that there is no occa-
sion for alarm. All these things must
be admitted; but on the other hand
there is still big mass of securities
overhanging the market and seeking
buyers. 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 or pools which must ex-
| pire and liQuidate. In some instances
these new creations have been held
by rich but inexperienced operators I'M
til sheer exhaustion has forced them to
sell.
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 s75,00O,60O, and it is known
that other leading railroad systems are
contemplating heavy issues made i'm
perative by the urgent demands for
improved transportation. These new
securities of standard corporations are
sure of a market at 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 tho there is no immedi-
ate scarcity of funds still the inelastic
condition of our currency systems nee
essttates a policy of extreme caution
if we are to escape difficulties when
the autumn crop and business de-
mands and at high level
Next month government receipts
are likely to considerably ex-
coed expenditures; SO a further alb
sorption by the treasury may be locked
for; possibly obliging Secretary Shaw
to take further steps for contracting
the Ill effect of government opera
tons.
These are some of the more distant
influences that will have to be consid-
cred. The more immediate cause Of re-
cent declines seems to have been the
forced liquidation of some of the newer
financiers who had rapidly accumu-
lated large fortunes and embarked in
a series of questionable ventures which /
the underlying conditions just referred
to have simply brought to a crisis (
the market will be
much improved and strengthened when
these elements Of weakness are eradi-
Gated; but until they have been, values
are likely to be unsettled and may drift
to a still lower basis. There is no oc-
casion to fear panic: simply because
the material for panic is not in sight
Business continues on 4 large scale and
, lower range of prices for both com
nodities and securities should be q rea-
son for strengthening not impairing
confidence. 1t is remarkable that so
extensive decline as that witnessed
II the last six months should be en-
iured without disaster. Stocks are
steadily passing from weak into strong
lands: many good securities have
hrunk 90 to 40 points and over, and
when liquidation has run it's course
here will be only these obstacles to a
rood recovery, VIZ. the crop, money
md labor situations
AT present there is more or less per-
,lexity regarding all three. The ag-
icultural outlook has been materially
,ffected by the unusual backwardness
f the season increasing the danger TO
orn and cotton from frost; and the in
ustrial outlook is still unsettled by
abor agitation.