The Mankato free press., 1903-08-14
CONDITION OF FINANCES
Henry CIews Tells What Is Doing
in Wall Street.
From Monde x1,r Do;1

says: Continued liquidation carried th
stock market down to new level record:
For the time being intrinsic values re
ceived scant consideration; the better
class securities as usual being sacrifc
ed to protect those which were practical
] ly unstable under existing conditions
Much of this liquidation was forced; b
which, is meant that the enormou
shrinkage in values compelled lenders t.
sell collateral often at serious sacrific
In order to cover loans. This compul
sorry liquidation must have cancelled al
enormous volume of obligations of al
sorts, and to that extent the situation
has been greatly improved But tn,
losses thus imposed have been exceeding
ly severe; and while the worst of tn,
crisis has probably been seen, the down
ward movement gained such momen
tum that it is difficult to check unit
all the weak spots have been thorough
ly eliminated.
"One of the remarkable features il
connection with the depression of the
| last few weeks is the absence of panicky
symptoms, Notwithstanding the extraor.
dinary declines nor is there now any
reason to anticipate panic because prices
are too low and sound conditions pre-.
vail outside of Wall street. Another DO
tent reason, however, for absence OF
panic is the skillful manner in which
the campaign of liquidation has been
conducted. Some of the more powerful
! interests may have been instrumental
in forcing the decline; nevertheless, as
on Friday, strong parties have invariably
stepped into the breach and stopped the
downward movement when it became
too threatening, thus giving those in diff
ficulties fair chance to readjust them
selves. Without this powerful restraint
there is no doubt worse conditions might
have followed, and to this extent the
street is indebted to the community of
interest idea, which in times past has
come in for more than it's share of abuse.
The men who dominated vast aggre-
gates of capital knew better than any
others the great expansion in all sorts
of obligations which eliminated in 1902;
they, too, knew better than any others
that the legitimate growth of business
limperatively called for vast outlays of
new capital, which could not be deferred
and which must impose strain upon the
money market that would fan disas-
trously upon all speculative construc-
tions. No doubt, with the foresight
which their position gave them, they
prepared in advance for the events now
occurring, and which have been anticipat-
led by all experienced observers, who
wondered not so much at the approach
| of the day of reckoning as at its long
postponement. 1t is fortunate that men
of such power did, in measure, prepare
to meet these contingencies; for if they
aided the inevitable reaction they also
| effectually prevented it from developing
a panic. Of course, this power has been
used by those who exercised it to their
own advantage; nevertheless, the finan-
cial community is heavily indebted to
those who put stop to speculative ex-
cesses and restrained the reaction which
they induced.
When the atmosphere in Wall street
begins to clear it will be found that
many good stocks are selling much be-
low intrinsic vaules. These are good
railroad stocks selling at and 51s per
cent basis and earning double that
amount; yet buyers are few because
confidence and buying power are both i'm
paired. With revival of the former,
however, the latter would rapidly in
crease. Outside of Wall street there has
been no serious reaction Quite possibly
the depression there will impart a more
conservative feeling in commercial and
industrial circles which will do no
harm; in fact, return to more normal
conditions would be absolutely beneficial.
For instance, as iron declines the chances
improve for enterprises and outlays
which hitherto have been held in check
by high prices. Witness, also how the
high price of cotton forces mills to shut
down and buyers to diminish their pur-
chases. All concerned are threatened by
the unreasonable speculation in cotton
and who doubts that a sense of relief
will be felt when this disturbance is end
/ ed? Improvement should follow the re-
moval of abnormal conditions in the
iron and cotton industries, though the
readjustment period may cause more or
less temporary interruption to business.
In agricultural circles however, the out
look thus far is most assuring. Though
the crops are late there is no more uncer-
tainty than usual about results. The
promise is for fair yields of cotton, corn,
wheat, oats, hay and live stock at good
prices. The American farmer is as sure
as he can be of another prosperous year,
and this means much for the country at
large. So long as those dependant on the
soil enjoy prosperity, the mills, the mer-
chants and the railroads are sure of hav-
ing their full share.
Less concern is shown about the fu-
ture of the money market, forced iqui-
dations in stocks having done much to
solve that problem. Loans remain at a
high figure, causing some perplexity !;
but bank reserves are rising, ana be-
yond question the banks are in much
stronger position than for some time
past. Crop demands should now be
met without particular strain, and gold
imports will soon be facilitated by in
creased offerings of produce bills. AL
together, the situation is one that war
rants an effort to restore confidence. Liq
uidation may not be entirely over, but
the worst has been experienced, and me
situation is infinitely safer today than a
year ago, when prices were at the top
and confidence was strongest. Such a
contrast should encourage, not depress.