Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1903-07-27
Henry Clews Says Stock Liqui-
dation Has Apparently Al
most Run It's Course
HEAVY LOSSES HAVE BEEN MET
Sound Securities Will Not Go Much
Lower, But Weak Ones a Disturbing
EIement-Buyers More Conservative
Money Situation Shows Improve
ment.

course, and what will be its effect upon
| general business? These are the two
questions at present uppermost in the
minds of business men, though definite
answers are impossible under such a
conflict OF opposing forces as are now
actively at work.
satisfactorily accounted for over and
over again: and now it is the conse-
quences of that decline that cause con-
Germ. Losses have been exceedingly
severe, and the fact that they have thus
far been quietly met without inducing
open disaster, is simply astonishing.
1t is explained, of course, by the other
fact that the losses have fallen chiefly
upon the rich, and still another, that
liquidation, while forced, has at no
time allowed to develop symptoms of
panic. Support at critical times has
always been forthcoming from big in
sders, as well as from bargain hunting
investors who usually appear when Sc
curities sell at or under intrinsic val
ues. For high grade railroad stocks
with proved reputation for dividend
earning capacity, there are ready pur-
chasers on every decline, and these no
doubt will eventually have profitable
investments. even should the market
fall to q still lower level. AS to the
latter possibility it depends entirely
as to the completeness Of liquidation.
nd DC n no Of q mr.
mature. 1t is quite certain that bottom
will not be touched until the weak spots
have been thoroughly eliminated,
while the bear element, encouraged by
recent success are likely TO carry their
campaign to the extreme limit. lndi-
cations are that the bottom is not far
distant, and that many stocks are at,
or sufficiently near bottom to warrant
purchasing on downward scale. This
applies. however. only to really sound
securities. There is still on the market
"a mass of undigested stocks, or indi-
gestible, as Mr. Hill aptly described
them, for which still lower market is
possible, if not probable. AS dis
turbing element, therefore these must
continue to be taken into consideration.
while II remains to be proved that
the OVERRIDING of the last few years
has been sufficiently discounted, or that
the higher rates for money have ex-
erted their full effect, 1t is important
not to overlook corrective forces when
are actively at work and the effect or
a good harvest, such as is now within
reasonable expectation. Wheat, corn.
cotton and all important crops have
made good progress during the past
month. Pessimism is chiefly confined
to Wall street, while all thru the west,
the northwest, the southwest and the
south there is every evidence of bust
ness activity and progress. The rail-
roads in these sections are taxed to
their fullest capacity in spite of re-
cent large additions to equipment, and
officials show more or less fear of a
car shortage when the crop-moving
season begins. If there is note of
hesitation anywhere outside of New
York and New England, it has its
source in the excuses of which Wall
street has been the center.
.As for the ultimate effect of this
reaction upon general business, pre-
dictions are useless. Buyers are grow
ing more and more conservative, like
wise those who take the initiative in
business and industry. Should new en-
terprises receive a check we may app
proach for the first time condition
where production has overtaken con-
sumption This has not yet happened
but the enormous additions to our pro-
ductive capacity are already having an
effect that would quickly be more pro-
nounced in case OF slackening de-
mand. A shading Of prices and sales
for export would give prompt relief;
yet this would make an inroad upon
profits of the industrials, especially in
view of the increases in wages recently
granted to meet the demands OF labor.
1t must be admitted, therefore. that
the business outlook is less promising
than year ago, tho good crops will
undoubtedly save us from any import
ant reaction, and might insure us an
other good fall trade.
1.-The monetary situation is certainly
improving more than indicated by
either the weekly bank statement or by
the current high rates for money Lii
quidation, such as lately experienced.
has certainly put the banks in much.
better control of their funds, besides
enabling them to loan under more sat
isfactory conditions. Good rates for
time money promise to prevail, and
there there will be plenty of funds for
legitimate uses, but little for specula
ton or unsound properties. Crop de-
mands will soon assert themselves,
still the indications are that there VIII
be less suffering from stringency this
fall than a year ago. Our credit abroad
is excellent, and we shall have little
trouble in borrowing there If necessary.
Europe already recognizes that many
of our good stocks are selling below in
trinsic value, and that regardless of
further declines they will eventually
yield handsome profits on present
prices. What with foreign purchases
of our securities and hight rates OF in
terest here, there is no further induce
ment for gold exports; in fact, If pres
ent conditions continue, we shall soon
begin importations of gold, which
would add to the relief here. No con-
Germ need be felt about payment for
the Panama canal, as when due, tnat
sum will probably be taken, not from
the banks, but from the vaults OF the
United States treasury, where 1T Is now
uselessly locked up
"rThese conflicting conditions create
"a good trading market. The situation
seems to be under strong control, and
there is a liberal short interest ready to.
cover eyerv important decline. 1t is
quite evident that there mas peen some
important shifting OF ownership dur