The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-05-22
THE FINANCIAL SITUATION.

stock market last week. the furious buying
followed by as furious selling and the
periods Of stagnation succeeded by those
of intense activity one sees that the marker
still presents the same general characters
tics that have distinguished II now for nearly
two months, that Of a nervous, fevcrish
uncertain affair, supported by certain fao-
tors of obvious strength and suffering
from certain elements OF weakness. The
restless and mutable substance OF the
speculative spirit has never been more
clearly demonstrated than it has been
recently all publish" one minute and
Abearish" the next, mildly enthusiastic
over the bright spots in the situation one
day and unable to see anything but the
dark side of things on the day following,
convinced one hour that American industry
has never been in more prosperous state
and that boundless future looms before it.
and the next hour that socialism has the
country by the throat and that President.
Congress and State Legislatures are all in
league to ruin the investment properties
of the land. Wall Street Ia not always, to be
sure, in such uneasy temper, that is to say,it
is not always as greatly ratified as it has
been of late. Perhaps the fair thing to
say is that speculation, always more or
less mercural, has in recent weeks been
especially so. The great mass Of operators
have been unable apparently to decide
whether declining or an upward move-
ment in values ia in progress, and they
have been floundering around with minds
blown this way and that way by every
wind Of gossip and rumor and tempo
rary vibration of prices. The leading
stocks in the market, such as Union
Pacific, for instance, have risen and fallen
within a range Of from four to six points,
the fluctuations taking place often in the
course of two or three succeeding Stock
Exchange sessions. When the market has
been strong the air has been filled with
every silly deal story imaginable, and
when prices fell tales equally absurd to
account for the drop have been freely Cir
culated. Regarding the immediate posi-
ton, the swing downward has been carried
about as far as it usually has been, and an
upturn ought reasonably to be looked for.
At any rate, the spectator in the nearby
weeks who has sold stocks after two or
three days of weakness has usually found
much cause to regret his action.
The fact is, Of course, that variable and
almost historical as the market has been
there has been some excuse for its conduct
Strong forces have been pulling in different
directions. This diversity of influence
would, it might he supposed, tend to keep
the market in "A state of equilibrium with
out any notable movement one way or the
other. But speculative fever has been
excited, market operators are not yet
willing to adopt prudent policy Of in
a ction and are led by the Western element,
who are not happy unless they have tens OF
thousands of shares OF stock "out" on one
side of the market or the other. The fact
chiefly operating against values appears to
be that the public considers the price Of
stocks, looked at from an investment point
of view, as too high, and that as no impor-
tant corporation buying Is now in progress
the market only receives support in times OF
weakness from the scale down" purchases
of capitalists or from the retirement of short
contracts. There are those who are wholly
to the side of higher prices and
who believe that much higher prices will
be seen before the year Ia out and declare
it to be their sincere conviction that the
best thing that could happen to the market
would be further pronounced break in it.
At level thus reached, they affirm, an
immense Investment in securities would
take place proceeding from the public
and foundation would be laid
for an advance in prices which would put
the market ten points above the level on
which it now rests. This belief, it is need
less to say. represents somewhat extreme
view. On the other hand, security prices
of in
the present cheapness of money, and no
man can estimate the investment value
Of securities unless he calculates how
this value is now and may further be
affected by the continued fall in the pur-
chasing power of the circulating medium.
People are not now willing, perhaps,
bearing in mind the old standards in
these matters, to consider stocks cheap
On less than a 8 per cent. dividend basis.
but if money now is worth considerably
less than it used to be ) per cent. basis
If stocks is too low. The computations of
the worlds leading statisticians and mint
ing authorities are that of the present stock
Of gold in the world over one-half has been
produced in the last twenty years alone.
1t liz impossible for any one not to UNDER
stand, whatever his views are as to the
cumulative theory Of money. that the
addition to the general total Of the worlds
gold in SO short a space Of time of so vast
an increment as this must ha We had direct
effect upon the value of the gold itself,
hat is, must have cheapened its value to
such an extent "a to have pushed upward |
he prices of all the things for which gold |
= exchanged, including stocks and all
securities save those limited to a !
liked rate of income. As the production
IF gold il, so far as can be adjudged, still |
Increasing at rate fully as great as that |
maintained in the recent past, the fact |
must moderate our views of security valu- |
ltons as affirmed by the crteria of two |
lecades ago, when, if anything, the ten
lency Of the production Of the worlds
standard money was to decrease and thus |
o exercise a depressing influence upon
prices To the force Of this with us must
,e added that of the increase of our bank
tote circulation. which last week alone
Enlarged over AOOO,ooo. Indeed, our best