The San Francisco call., 1903-12-04
Money, Stocks and Trade.
LUCID REVIEW OF THE CURREN-
BUSINESS SITUATION.

4 Lucid REVIEW OF THE CURRENT 1
BUSINESS SITUATION.
rae New York circular OF Henry Clews says:
Thanksgiving holidays naturally tended to re-
strict stock market operations, but in spite
a. this confidence is rising and better under
tone peryadeE the street This no doubt is
partly due 10 manipulation; YET a month ago
rIpulations and the mere fact that they are
even attempted demonstrates a change OF feel
ing and judgment among those oehino me
ecenes
ket was the differentiation between railroad
shares and TIE industrials. the latter being
week and irregular, while the former we're
genera IIv strong and scored unexpected recov-
cries As already intimated in these advices.
Iforfdsri~n and in1proved financial conditions.
The whole trouble had centered in Wall street
and any improvement there was certain 10 be
reflected in values OF securities having intrinsic
the bull contingent seized the first opportu-
nifty Tor lifting the market-sn opportunity
long desired; sno there IS no doubt they mad
the moral II not the actual support or DIG
banking interests who have large amounts Of
desirable new issues which they expect 10 float
YER, shortly.
In this connection it is worth noting that
the railroad situation continues very satisfac-
tory. Earnings are larger than previous ban
ner years. and many o. the weil-known roads
arr earning much in excess OF present diVi-
Se-ds one thing IS as sure as anv business
condition can be. and that is that there will
be no reduction in the dividends q the we'll
established and well-managed railroads. the
margin OF IfDIA nt-lB dlIrdAe - AAAlJ4c AA-dA
moderate contraction OF expenses OF I'D
EirOvements VIII insure the stability OF oiFi-
dends In many instances the enormous out
lays Tor reconstruction etc palo out OF
earnings will soon cease altogether. and this
may result in bringing some Of the non-divi-
derd payers into the regular dividend llst
such facts as these have been temporarily lost
sisht Of IN the food OF disaster and despond-
ency which swept through the stock Exchange
during th= closing year.
poor CONDITION OF INDUSTRIALS.
Unfortunately the same cannot be said Of
the industrials. They are not as rule in the
strong financial and physical condition Of the
railroads Handicapped by overcap apitalization
and bad financing. they are IN poor position
10 face any decided shrinkage in profits. or
course this is nothing new and has long
been foreseeu In the case OF steel the inev
its bic has already happened. and Il remains 10
be seen how other indUstrials win weather the
. storm when II comes Fortunately these Sc
carities are chiefly in the hands Of their crea-
tors They have not been very successfully
unlo2ceo uDon the dear pubic commission .
houses are practically bare Of such stocks. and
the banks accept them as collateral TO a very
limited extent II follows, therefore, that any
shrinkage in these must have a limited market
effect. considering their volume: the railroad
list having already declared its independence
of the industrials. such losses. already
said. must fall most heavily upon the original
holders. some Of whom have failed TO secure
profits once possible. and some who have
been obliged 10 sacrifice gilt-edged securities
10 meet their Obligations connected with in
dustrisls
This last sort Of liquidation. however, is
bout ever. and Il is QUITE likely TO appear
that the stock market has overdiscounted the
industrial situation. especially in view Of the
fact that there is no business reaction OF i'm
portsnce yet in sight. Industry has simply
reached the top wave; Il cannot plunge clear
to thc bottom in few short months. and the
decline viii be gradual AZ in the case OF
rho steel trade. price concessions will develop
orders held back FOR just such opportu-
mites Should labor follow a prudent and
reasonable policy accepting its share OF the
inevitable reaction, the consequences viii be
less serious 70 all concerned and should re-
suit in continued prosperity upon a more mod
crate and permanent basis that lately experi-
enced. Next year should find US upon more
cold ground than in 1902 1903
MONETARY OUTLOOK
The monetary outlook is growing more "a
vorable. Preparations FOR the $50. O0O. 600 Pan
ANA canal payment Of course exert n i'm
and are likely 10 materially check gold Inn
ports. which thus far have aggregated about
fo.oUc,cp 10 serious disturbance to the
money market need be expected funless iure-
sble). for the reoson tSat the bulk OF this
money viii be taken from the Treasury and
not from the banks. also the fact that bank
crs have been accommodating exchange in an
ticipGfiou of this payment 10 extent that
VIII render transfer easy. Funds viii soon
be returning from the interior and our credits
abroad have been materially STRENGTHENED bv
heavy cotton shipments. Preparations for jan
uary disbursements may cause some tenno.
rsry stringcncy, especially II the canal nav
rrcnfs occur al the same time. but after these
are passed the local money market should be
IN safe and comfortable position
There now two distinct parties on the
Stock ExchsnEe-onc buliish railroads and
smother bcarish on the industrals Whefhe-
such opposing conditions will stimulate ac.
tivity or not remains TO be seen. Much. nc
doubt. viii depend upon the Northern Securities
decision from the United States Supreme
Court. which cEuccfed NEXT month