The Cairo bulletin., 1905-05-01
OISTRUST At THE
BOTTOM OF BREAK
HENRY cLEWs, IN HIS WEEKLY
REVIEW SAYS THERE WERE
NUMEROUS CAUSES FOR
DROP IN THE STOCK MARKET.

ket has been demoralized and at times
almost panicky. After drop of 10 to
20 points periods of upward reaction
were TO be expected, but the specula.
live situation was such as TO aeceler-
ate rather than check the declining
tendency Distrust appears to have
been at the bottom of the break in
yalues-distrust caueed by variety
OF disturbing influences.
Bank Defalcation.
The most important Of these was
the large bank defaleation at Milwau
kee coming after the uneasy feeling
created by the Equitable squabble.
Next came the collapse in the wheat
speculation, resulting in a decline of
about Csc per bushel within 80 DAYS.
These outside facts alone were sui.
ficient to cause an important decline
in the market; but the technical posi-
ton was also such as to encourage
weakness. Some very important pools
made up among the largest operators
have recently been dissolved there is
strong suspicion Of friction within the
community Of interest; :" and the
backward condition OF the crops as
well as the expected naval battie be-
tween Russia and Japan, have each
contributed their quota of depression.
To these adverse influences was add
ed the fact that prices CT securities
were still considered too high to make
attractive investments; so that while
| the general situation continues salts.
| factory and sound the market was To
tally unable to resist such combina-
ton of unfayorable Influences.
s Issue of Bonds.
The demand for securities from in
Yestors has been very largely satisfied
by the heavy flotations of the last six
months. Several hundreds of mil
lions Of new bonds and stocks, chiefly
the former, have been issued during
that period; a considerable proportion
of this amount, of course, being for re.
| funding or merger purposes Never
| the less, the new capital commitments
for the past six months have been ex-
ceptionally heavy, and the fact that
| further issues are in contemplation
can hardly be regarded as d bullish
argument, although it may possibly
4 oblige powerful banking interests to
sustain the market in order to facili.
tate their location. A. rather striking
| illustration of the diminishing appe-
tite for bonds was shown in the low
price of about 101 at which S25, 600 600
of New York city bonds sold last week.
This was decline of points, due en-
tirely to oversupply. If investors are
becoming Indifferent to such high class
securities as these, how will they feel
towards other bonds of less desir.
able quality so long as prices are
! maintained at such an abnormally
high level?
The weakest side of the situation
4 seems to be strictly confined to the
stock market, which has over.discount
ed all favorable conditions. General
prospects continue favorable, the croI
situation being promising in spite OIL
the backwardness caused by colo
weather. The industrial situation is
also suspicious, and building is likely
to be conducted upon an unprecedent
ed scale during the present year, 81
that labor wall be we'll employed; and
profiting by past experience, it Is Il
be hoped theer will be less troubl,
arising from strikes and disputes be
tween employers and employees. Fo
all sorts of building material there vii
be an increased demand at profitable
prices. Phenomenal orders are beinj
placed for iron and steel, and, Will
the railroads continue as usual TIL
principal buyers, larger portion o
orders than usual are coming in 70
general construction The splendid re
port OF the United States Steel corpc
ration is emphatic testimony of tn
wonderful activity in the iron an
steel trades. Other metals sympathiz
more or less with iron for the reaso
that they, too, must share in the gel
eral demand for constructive purpose!
In nearly all respects the industria
situation is fully as satisfactory a
during the boom period of two year
ago, with this difference-that price
are not so high and, therefore, moi
stable, while labor Is well and prof
ably employed and fortunately less di
posed to incite trouble. Many of IL
industrials are reporting good carr
ings, and are likely to continue doln
so for some months to come.
Good Railroad Earnings.
Railroad earnings are also exec
lent. Reports for the second and THU
weeks Of April show gains Of near
10 per cent over last year. Anoth
proof OF the large volume Of trana
tons is found In the clearing house 7
turns, which last week were sc p
"A cent ahead Of the previous year az
10 the week before showed an increas
' of So per cent. Financing Of impor
ant negotiations, as well as specul
10 ton, may have something to do vii
70 this increase but very considerab
portion of II Is ,inquestionably due