The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1903-12-06
ALL LUXURIES Topped OFF
BIG DEMAND FOR BONDS AND GOOD
SECURITIES LOOKED FOR.
Bright Outlook for Railroads to Sc
cure an Abundance of Money at
Reasonable Rates of Interest.
Special to the Indianapolis Journal.

funds In New York and other important fiscal
centers after the first of January. The fear
with bankers trust companies and money lend
ers In general is not in scarcity of cash. but
that 1t will pile up uncomfortably. This condi-
ton. IL 1t materializes. will be due quite as
much to the timidity of borrowers to any
other cause, a development which cannot be
looked upon wholly favorable in a broad
sense. Such a condition will reflect a reaction
airy tendency in general business and a lack Of
confidence in the future. The effect how
ever, win be corrective Of the speculative ex-
cesses which have been such feature Of re-
cent financial and industrial history.
The business world has been taking In sail
for months and the tremendous liquidation
which has been going on has curtaiIed indebted
ness TO an extent hardly dreamed OF. This is
not wholly reflected in the bank statements
which appear periodically. but the process has.
nevertheless. been going on insistently and on
tremendous scale. Personal expenditures have
been cut down in every direction where the
pinch has been felt in the least. This. to a
siderable extent, IL curtailment of waste
fulness. It has not. so far, been an impinge-
ment upon the comfort of the people and has.
therefore. not reduced mercantile sales to the
extent which might have been anticipated. Lux
uries have been Topped off to a considerable ex-
tent. but the business of those who supply
commodities general neCeS
sary consumption keeps up surprisingly.
background prosperity has not suffered ap-
RaTyests but tbs Farmers ana paters of tSs
West and South getting larger net returns
.ne1r s @ nan III any yea
1903 Is adding an amount far above the aver
lative Accommodations have. in many cases.
melted away, leaving their former possessors in
fortune the Importance of which is very likely
TO be exaggerated. In fact IT has been grossly
because of the iii luck which has befallen the
gambling element the whole country Is in dan
into panic ultimately. Everybody now REAL
ICES that the reaction which has taken place In
o vded and ha
simply return of values TO something like
have suffered with the worthless or speculative
securities. Recovery or the good things will in
Se msrket for Securities Which haVs in them
real merit and which look cheap. taking into
pr t anb Which tbev
may be intimately dependent.
A market feature which Is now due to develop
is the increasing demand for bonds well as
high-grade stocks The great mass of old bonds
are securely lodged in the strong boxes Of the
provfdent and the wealthy classes. The newer
issues still in the market to a considerable
extent but they gradually being taken out
of the vendors hands by those who have money
to invest. BY the turn OF the year this move
ment Of capital will increase. There win be
still more new issues of bonds to supply the
needs but the absorptive power Of the American
public In this direction seems to have no limit.
AS the wealth OF the people continues to pile
up the surplus Accommodations must find invest
ment. Inasmuch as there Is now speculative
chill the situation which promises
tend for some months into the new year own
ers Of idle cash will. perforce, turn to bonds as
the most desirable field Within the next six or
eight months new railroad issues to the amount
Of possibly $500 coo 600 or $500 600 may be Of
viii, in q large measure. be used to take up
provements to railroads and the conversion of
floating into fixed capital as well as in the
into capital account. wherever it belongs.
The financial arrangements OF the great rail-
are no longer worried over the future they
have been standing in the gap for year and
prises with their personal credit They have
shown confidence in their properties through
look was most threatening and when the
prophets Of evil filled the newspapers and mar
Now that the outlook has frightened and there
is certainty ahead OF relief the entire securi-
rent supply OF desirable bonds and rev issues
which are pending are pretty well cleaned up
bank too strongly on hopes of a marked per-
manent Improvement in stocks. This will come
AS the bond market hardens there are likely
to occur sharp recoveries in stocks, but hardly
or quotations that will stick. Banks tn every
large city are carrying securities which they
for escaping without loss. Every considerable
rally will bring this stuff out and there is a
mass Of II to come. A few OF the sturdier banks
have already applied the ak. but a majority of
them have unsold collaterals ON hand which. II
disposed of at present prices would show q
loss. The extent to which this has been done
is not sufficient to jeopardize the safety of the
Az Qfff uffn Il Of
discomfort to the people who are carrying the
a. an out unde It S h sen a o
count Of banks and trust companies which
checks every rally ally In the market
Of that kind to aid them in their campaigns on
been disappointed and on every advance they Ds
put out short lines with the utmost confidence.
Latterly. however, they have not met with
their usual measures of success. the market hav-
ing developed more stubborness than they like
welded TO the bull nor the bear side, but who
are governed by impartial Judgment of condi-
patton Of December or January boom. co ,rnss-
quently, prices do not react and the bears are
mitnrents This has produced a market situa-
ton akin to a deadlock. and more COM
mission houses and brokers wailing and dis
cussing duh times.
The passing of the preferred dividend of the
Republic Steel and Iron Company is variousy
construed 1t is accepted as a confession of an
unpleasant truth I'm connection with the steel
and iron trade. but 1t is not upon that point
that discussion hinges. In quarters the
action OF the directors is held to be a belated
admission that previous dividends were unjusti-
fled and that the earnings which We're dis
tributed to stockholders should have been held
in the treasury working capital In other
quarters this view is combated and the theory
exploited that the property is In sound shape
but will have need for earnings to properly
carry the business. The Republic Steel and
Iron Company is looked on OF the strong
est OF independent concerns being able to sup
ply itself with most every kind OF raw material
and of working IL into finished products The
only thing IL seems to lack is wire mill. and
| IL Is that account that the election OF Mr.
John w. Gates TO the directorate is given new
Importance. Mr.. Gates is popularity supposed to
be one of the best equipped wire manufacturers
In the United States. His investment In a large
block of Republic Steel stock is said TO fore
nail plant and thereby beginning active compe-
tition with the United States Steel Corpora
ton. Looking beyond that shrewd people
in the move a campaign TO compel the trust
to take over the independent property. Negotia-
lions TO that end have been commenced and
dropped half a dozen times In the past Close
friends OF Mr.. Gates that he will not take
an active personal part In the management OF
Republic Steel His health Is far from robust
and he has conhded to his associates that his
main care hereafter viii be his own phys,caI
self last summer when at Saratoga He rallied
l..xs. Iaf has