The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1904-06-24
EXPORTS DECREASE.
General Business Handicapped BY
High Cost of Proc uction.

The following is Henry Clew's weekly
letter:
New York, June 20.-Though dealings
on the stock exchange are limited, the
market displays strength of undertone
that promises we'll for the future, pro-
vided no untoward events intervene dur
ing the next two months. The chief
source of strength at present is a sat-
isfactory monetary situation, funds be-
ing plentiful enough to avoid any anx-
iety concerning crop demands when they
begin. The next reason for hopefulness
is the crop outlook, which is satisfac-
tory as a whole in spite of backward
ness. Reports of business reaction are
frequent and are unfortunately con-
frmed by current reports of railroad
earnings and other evidences of contrac-
ton; but Wall street turns compare
lively deaf ear to such arguments, and
replies that all such conditions were
discounted long ago by the shrinkage in
security values and that the time is now
ripe for anticipating better things.
One significant demonstration of con-
fidence is the quick absorption of re-
cent bond issues. These have been nu-
merous and large, but the promptness
with which they have been taken and
their absolute failure to depress the
stock market reveal an underlying
strength that is both surprising and
gratifying. This week has witnessed
two big issues 100000 New York
Central bonds and $4O,0OO,0O0 Southern
Pacific preferred per cent stock. The
former was expected but the latter was
a surprise, but neither exerted any ap-
preciative pressure on the market, ex-
cepting in the Southern Pacific common
shares. This shows buying power in
reserve that was quite unexpected.
Though financial conditions have much
improved, the same can hardly be said
of general business and industry, both
of which are handicapped by high prices
and high costs of production. The pro-
cess of readjustment, however, is al
ready under way. Pig iron has had a
heavy fall, and finished iron products
must soon accept the inevitable, although
prices are still held up by trust influences
and contracts delayed in consequence.
A great deal of work is also postponed
by the excessive demands of labor; but
these, too, must be modified by the in
evitable leveling- down process which has
already set in. Cotton and cotton goods
are also declining, and thus facilitating
establishment of the industry upon a
sounder basis than heretofore. This pro-
cess of readjustment, painful as it is,
must be faced, and the less it is resisted
the better for all. Costs of production
are altogether too high and the cost of
living cannot be reduced until these come
oO"h LhC CASCoolNCly lCNCl VI
the past few years. AS soon as those
who take the initiative find values set
tied upon a more normal basis business
improvement will succeed present de-
preston. Good crops this fall will be
the most important factor in any i'm
provement. Crop failures would be ma
tional disasters, not only as affecting our
foreign trade and our agriculture as the
chief basis of our prosperity, but also
because of the effect upon prices of food
products, which are already very high
for the reason that demand is overtak-
ing supply. Hence, our particular need
this year is good crops.
A rather unsatisfactory feature of
our foreign trade movement was de-
crease of $l5,OOOOOO in May exports,
due to shrinkage of 8 millions in
wheat, millions in cotton and 21s mil
lions in corn. Our exports of manufac-
lures and minerals are, however, increas-
ing, and if the persent downward ten
dency of commodity prices continues the
shrinkage in exports will be only tenn
porary affair.
Our credit abroad continues good, and
gold shipments appear to have ceased
for the present, Europe having satisfied
its immediate wants. What effect the
war will have upon the gold movement
remains to be seen, this and the increas-
ing supply of loanable funds being the
chief inducements to gold shipments.
Very soon future cotton and grain bills
will be in better supply, sufficient, pos
sibly, to offset these infuenses. Little
attention is paid to the presidential cam
paign, which contains no exciting or
alarming issues and no question concern
ing the soundness of our currency.
The outlook for the market may be
considered more favorable. Bad features
have been amply discounted, stocks are
concentrated in strong hands and money
is plentiful These are conditions favor
able to manipulation should the big
leaders so agree, and in the absence of
such plans we may look for fair trad
=.
VI