The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1903-07-06
STOCKS GET NEARER
TO INTRINSIC VALUE
IN MONEY MARKETS
Result Is More Favorable Con-
ditions in Wall Street, Where
the Heavy Liquidation of Past
Few Months Nearly Ceases.

Special to The Globe.
NEW YORK, July 5.-Heavy June
disbursements, improved monetary
conditions abroad and a temporary
oversold condition of the local stock
market induced fair recovery in val
ues and q consequently better teellng
on the Stock Exchange The chief
obstacle to further activity was the
approach of the holidays and an indis-
position to carry stocks over two
days interval.
We are now approaching the usual
period of summer quiet. when album
dant opportunity is offered for study
ing the probabilities upon which wan
street always waits before taking the
initiative. The first six months of 1903
have been a period of severe and thor
ough liquidation. What about the
next six months? The reaction follow
ing the underwriting and speculative
craze of 1912 came sooner than an
ticipated, as reactions of that nature
invariably do and the questions now
pressing for solution are: Has the
reaction eliminated? Is liquidation
over? Is the readjustment between
supply and demand, or between guam
tty and value, complete?
Bottom Is Not Reached.
To be perfectly frank, we do not
think the adjustment is complete. A
number of good securities have come
down to intrinsic values, where in
VeStors can take hold with confidence,
but there are still many of the newer
creations selling at inflated figures
held UP by sheer force-which have
yet to face the test of trade reaction
diminished profits. 1t is just here
that careful judgment must be eXeT-
ciSed in estimating the future of the
stock market While the period of
special stress in financial circles is
over; while the situation is better than
it was six months ago. while all pro-
longed downward movements are ac-
companied by rallies such as the pres
ent, still these facts furnish very lit
tie guidance as to what may be eX-
pected between now and the close of
1903 AS we have stated in previous
adViceS, the dominating factors will
be the crops and money. Political cam
paigns may have to be taken into con-
s1deration, but these at present do not
threaten any very serious problems.
The labor agitation has proved a seri-
Gus burden upon industrial enterprise,
the full effect of which remains to be
seen, but indications are that such
demands have at last reached point
where self preservation prevents fur
Their concessions and the next six
months may demonstrate whether or
not business will stand the new exac-
lions.
9 Crop Conditions Favorable
In the crop outlook there is nothing
dlScOuraglng except backWardneSS In
the case of corn, this is of conse-
quence, because it increases the dan
ger from frost and the prolonged alb
Sence of high temperature is unfavor-
iorIot Of
warm weather, however, would work
great changes in this crop. For wheat
we are practically sure of a plentiful
harvest, together with a good export
demand at profitable prices. Cotton
is also backward, but as a result the
plant has good roots, is vigorous, and
under favorable weather conditions
could produce a bumper crop The
crop situation, therefore, may be sum-
med up IN the statement that good or
normal weather during the remainder
OF the season would yield US another
satisfactory and profitable harvest.
Since we have just passed through
two months of abnormally bad wealth
er, 1T seems perfectly reasonable to
anticipate more normal conditions in
July and Augustine growing months
The monetary situation is really bet
ter than anticipated, chiefly owing to
severe stock market liquidation and
Inc banks throughout the country
are about as well off in respect to re-
- serves as they were a year ago the
percentage of legal reserve to deposits
IN all the national banks bling 2208 on
June >, 2268 on April 9 and 22.33 on
July 10, 1902 National bank circula-
ton is $50,000,000 larger than wear
ago. capital stock shows an increase
OF $4l,0O0,000 and surplus and other
prohts an increase of $4,000, 900. At
the same time the national bank loans
outstanding amounted to $3,415 000, 900
on June s. an Increase of $4,000, 600
over the statement of July Is last year.
SO That 1T is clear there is little room
for further expansion. The banks.
however. have their resources under
much better control than a year ago.
there is less money employed in stock
speculation and ordinary business re-
qulrementS are more likely to be less
than larger than last year, so that
when the stringency incidental to crop
movements becomes due it promises to
be largely discounted in advance, as
events foreseen usually are.
There is evidently money awaiting
investment when desirable opportunity
offers. This was strikingly illustrated
by the remarkable taking of PennsyI-
Vania's $70,000.000 of new stock, all of
which went to stockholders and none
to underwriters. The good effect of
ottSii u eiHSetCIlOHSI however, is partly
counteracted by unfavorable develop
ments in many of the newly born in
dustrials which are giving way under
stress of present conditions. Appar-
entity we are on the verge of a new
Dra of industrial reorganizations the
9hree most noticeable this week being
the Shipbuilding Trust the New Eng
land Yarn company and the Cotton
Duck company. Such events delay the
recovery of confidence, which now
seems fairly due. After discounting
unfavorable news to such a liberal
extent it is possible to look for fair
recovery, and. should crop and money
conditions prove favorable a more act
i've and stronger market should follow
later on. July disbursements reached
nearly $140,000,000, or $4,000 900 more
than year ago. portion of this
sum always seeks reinvestment in Wall
street, and the new Pennsylvania is
sue no doubt absorbed considerable
Good stocks that are selling on a 5
per cent basas are a good purchase
on all decided reactions. The same is
true of a number of good bonds which
are yielding IL per cent and over at
current rates. Henry Clews.