Omaha daily bee., 1903-03-09
SHARP DECLINE IN STOCKS
Stringent Monetary Conditions and Con-
gssted Security Market.
MEN WHO LOSE ARE ABLE TO STAND IT
Labor situation one Of the Things
which Tends Co Make the GEN
eral Business Outlook More
or Less Uncertain.

sndTV UeCTIneS THIs WCCK, INC Te6UTT OF UU-
setting rumors, firm rates for money and
further forced liquidation. A considerable
short interest had been created, ana cover
Ing on this account served to check the de-
cline at end of the week. While the mar
ket was In this sensitive condition no at
%tention was paid to good railroad earnings
or other favorable features, and the knowl-
edge that several syndIcates had quietly
liquidated recently at a loss or without
profit only served to increase the selling
pressure. In present monetary conditions
the congested condition of the security
market was made very apparent and the
knowledge. that further important creations
OF new railroad capital were pending was,
Of course. unfavorable' to values. Many OF
the financial leaders are absent and until
their return and the effect of stringency in
cidental to the end of March is passed no
real change for the better Is anticipated, al
though II may prove that the worse is now
being gradually discounted.
Continued liquidation must eventually
improve stock market conditions. More
disappointment than necessary was per-
haps shown at failure of the Aldrich bill.
UnQuestionably some additional reliet would
have been afforded by the liberty which II
gave the treasury to accept other high
class bonds than governments as collateral
for government deposits, but S.llure to Sc
cure This assistance is not really a serious
menace to the situation. 1t will compel
continued conservatism on the part of lead
ing bankers, which has ITS advantages, ami
may hasten the adoption or a common
sense modern credit currency system. Ii IL
furthers the latter object the Aldl 4ch bill
will not have died in vain, and its enemies
Will have wrought more good than they
knew.
Credit situation stronger.
The monetary situation probably shows
more underneath improvement than the
weekly bank statement indicates. In spite
of low reserves and big loans the credit
situation is probably stronger tnan "A year
ago. In the first place. a very large amount
OF our foreign Indebtedness has been can
celled, a considerable portion having been
transferred to this side. This notably
strengthened our position abroad; for, nav
Europe is the more Wiling to respond to
our present demands, The course of the eX-
change market indicating the replacing or
American loans abroad. The chief trouble
here is that large sums of money are still
locked up In syndicates, not
in ordinary stock speculation. Fortunately
most of these syndicates are well backed
I.nd the losses arising from their liquida-
ton or expiration have fallen upon those
best able to bear them. 1t seems very
likely that further syndicate liquidation
will have to he faced, and the securities
thus released must tind a resting place be-
fore the market resumes a really healthy
condition; but from the nature of the case
such a movement Is likely to be gradual
and accompanied by frequent lions.
One of the most satisfactory features is
that the public is not suffering from these
or recent declines. Commission houses are
generally in exceptionally strong condi-
ton, conservative. concerns having per-
sistently advised their customers to tighten
their holdings for months past. In conse-
quence the losses are falling upon wealthy
holders, whose earlier profits render them
abundantly able 20 meet present deprecia-
ton; in fact, in many cases the losses ire
profits into cash. Nevertheless the financial
situation is Sc confused by overriding IN
strength in Others that no safe predictions
can be made AZ to the future. Further
liquidation, as we said, is inevitable IN
good, II the next harvest proves sat.sfac-
tory, II we escape serious stringency next
fall, and If undesirable speculation be held
firmly In check, the market may eventually
be gradually and safely guided into a
stronger position.
Labor situation Threatens.
The most unsettllng factor in the bust
ness situation today Is the threatening and
often unreasonable demands of labor. Their
are signs that these demands have been
pushed to the breaking point, simply be.
cause costs of production have been pushed
SO high as to seriously %curtail, If not de-
stroy, profits and to check new enterprise.
leaders is foolish to the last degree and
will prove most unfortunate, not only fot
capital, but for labor, which I'm the END will
| Should present demands be enlarged and
pushed to the point or rupture, Ii may
easily start a reaction which, If wisdom
and moderation prevailed, could be in
definitely postponed. Those who control
large capital and large enterprises view
the situation with serious concern. Amer
lean labor is already securing generous re.
ward. and II costs of production are to be
further. raised our industrial supremacy,
like that of England a few years ago, will
receive a blow requiring years of sufferins
and repentance for ecovery 1t should MOI
be forgotten that we are unavoidably an
important factor in the worlds markets
and we cannot withdraw If we would
Great Britain and Germany, our chief
rivals, are rapidly adopting all our best
methods of organization and equipping
their plants with improved machinery; 50
that, with lower costs for labor and smaller
capitalization, they are already able &c
outrun us in the foreign markets until We
come down TO their cost of production. TIL
latter event must fall with most severity
upon American labor, because its present
extortionate policy plays right into The
hands of foreign labor, enabling German
and england to undersell the American
product and secure a foothold from Witch
they will oe driven out only through costly
sacrifices and struggle.