Evening bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1895-1912, 1903-11-04
Wall STREET AFFAIRS
HENRY CLEWS' REVIEW
OF FINANCIAL SITUATION
THINKS THE BOTTOM HAS BEEN
REACHED - INDUSTRIAL Fu.
TURE uNcERTAIN-THE
STRINGENCY.
New York, October II. 1903.

the stock market outlook. It is quite |
plain. however. that the time has ar
rived for clear cut determinations. and |
that experienced judgment is necessary
In deciding where liquidation has gone |
as far as justified and where II has |
not. 1t is equally evident, also, that |
the market has not permanently turned |
and is not yet on the way to real re-
covery; and yet there is no escaping |
another conclusion, that many good |
stocks are selling much below intrin- |
sic value having changed hands at
sacrifice prices in order to meet press |
ing obligations or to protect securities |
of doubtful value. This unusual move |
ment has disturbed the markets equi-
librium. so that that there is to-day a
wide disparity in values which cannot
be adjusted until both the good and
the bad have reached a level more in
keeping with new conditions.
Beyond question, the better class of
railroad securities are selling at very
attractive prices to investors. Our rail-
roads are in both excellent physical
aged. not over-capitalized. and general-
~ speaking are up-to-date IN all TO-
spects. In event of business reaction
their dividend paying capacity is not
likely to suffer, for the reason that
there is such large margin between
earnings and necessary operating eN-
lpenses that any loss in earnings could
be readily compensated for by dimin-
ished outlays for improvements, to say
nothing of the economies made possible
by recent betterments. II Is safe that
American railroads were never such
sound and profitable Investments as
they are to-day, and this fact Is sure
to result in their gradual absorption
into strong boxes at a time when good
securities are becoming decidedly
Scarce. In this section of the stock
market. therefore. there Is substantial
reason for a revival Of confidence, even
should additional unexpected shocks
induce still lower prices. When re-
covery does set in from present eX-
aggerated depression the better class
OF railroad stocks will assuredly lead
the advance.
As for the Industrial section of the
market. its future. II must be admitted,
is uncertain. Liquidation in that quar-
ter has been simply tremendous, and it
would seem as II these securities had
fully paid the penalty of excessive in
fiation. II must be remembered, how
. ever. the ndustrials have not yet with
stood the crucial test OF a business
reaction: their decline thus far, Steel
excepted being due to failure of pro-
meters and underwriters to float their
new creations. The general conserva-
tism now prevailing in business circles,
while an assuring symptom. is strong
Ily suggestive of reactiOnary tendencies.
If merchants buy less, as they are do
ing. when the harvest is good and far
mers prosperous. 1t means less to do
in factory: and If railroads begin 10
economic and stop unusual OUTLAWS.
that means less demand Tor steel and
many other products. Business men
recognize that prices of materials and
labor are too high, that construction
work of all kinds is too expensive and
uses ap capital too rapidly. Much work
Is consequently deferred, and the de-
cline in steel Is the first stel In an
inevitable REIMBURSEMENT to a lower
level. Labor, too. must take its share,
Wages and eXacuOns of the unions
have risen to practically prohibitive
r points under an overaggIessiye and
s oyergraspng leadership. The coming
= winter Is likely to see many idle work
nj . AZ Iah M a
}, ment having great possibilities for
good. has been weakened by its own
rollies. which will be likely TO cause
] a setback In its aggressiveness for some
] time to come. The present reaction Ii
just as much the result Of excuses ol
. labor as the excuses of Wall Street
'' with this difference; that the penalty
, for the latter has almost been pait
while the penalty for the former IL
!. still to fall upon those at fault.
{. September returns of exports plainly
;, show the effects of backward haryests
the total for the month being $1,000,
900 less than last year. Our imports
g however, fell OFF nearly $6,OOO,OOO, Sc
that the months excess of exports wal
SOS, 600 900, against $33,0OO,OOO yea
ago. Figures for nine months show
much more rapid growth in imports
tnan in exports but this tendency vii
be quickly arrested should We NEE
> any decided trade reaction. More con
Germ has been displayed over the fric
ton between Japan and Russia thai
deserved AT present though war II
that direction Is among the strong pos
sibilities in the distant future Tn
necessary concern is also shown owe
the approaching Presidential election
Experience shows that the latter even
always has less influence than feared
and In the interim we are likely Il
have little new legislation-"Stand pat
being the political watchword.
Should liquidation break out aires
still further declines may be anticipat
ed. though II it proves to have run II
course prices may slowly harden. Tn
monet nf tho lpplinn seems over an