Evening journal., 1905-02-04
STOCK MARKET
SHOWS STRENGTH
Althoughs Value May Be
High, a Further Advance
Is Likely
EFFECT OF BEEF TRUST DECISION

LlILbl VI DLLI lnu0l U[bl0lUN
New York. Feb. 4-Henry clews'
weekly financial letter. which WIS is
sued today, says;
Many stocks are now at record prices,
and measured by customary standards
are as high as conditions warrant I'm
der ordinary circumstances a. reaction
would be in order as soon as the Janu-
airy investment demand had been SAT-
isfled, especially as rich operators are
known 10 have materially diminished
their holdings and the big banking in
terests are decidedly conservative in
their views regarding the future But
lthe entire market shows a degree Of
strength that Is surprising, and which
for the moment at least sets aside the
usual standards Of judgment. The fact
is that when business is good and
money plentiful It IS almost impossible
TO materially depress market values,
although they may be unduly high.
Long-continued prosperity has inn
parted a decided degree OF confidence
amongst investors, which prevents amy
serious attack upon values and which
has been striSingiy Illus Ated by the
comparative insenslbiMty OF the market
10 gold exports, 10 the tariff. railroad
and trust agitations. or TO the threat-
ened political disturbances in Russia
Under ordinary circumstances the
movement In Congress to give the gov
ernment power to fix railroad rates
would have created serious alarm an
Wall Street. albeit there IS little PROS
pect OF such legislation becoming law.
The Beef Trust.
Another event that in ordinary times
would have unsettled values was the
Beef Trust decision, which takes the
ground that the packers business was
Interstate commerce and therefore un-
der control OF the National ANTITRUST
; law. If the Beef Trust was engaged
In Interstate commerce so are many OF
our great Industrial combinations
7 which possess "a monopoly in their line
OF business. and the application Of the
law to them may only be a matter Of
l invocation. The sweeping character OF
this decision and the wide extent of its
application are not yet fully appreci-
ated.
[ Politically considered. Il Is a good
Z decision, as it VIII moderate, II not re-
move, much OF the hostility towards
, capital which has its foundation in
monopolistic combinations and which
has been the basis OF many OF the So
4 cialistic tendencies OF the day. Finan-
! cially considered, its effect remains to
" be seen. Thus Car IL has been nil.
Much OF the business on the Stock
Exchange has been of "a professional
. character, and manipulation appears
IT easier for the rise than the fall Money
y is plentiful and easy, and this is a
T. powerful instrument in hands OF cliuueS
IS which single out first one property and
r then another for their operations. Since
d prosperity has been amply discounted
q and the investment demand. except for
j. good bonds. is subsiding, tho chief ar
guments for advancing prices are divi-
dend prospects or deals OF one sort or
lanother among railroads These are
s the potent influences on the stock mar
s ket at present-in1uences. it may be
y noted, which in the past have generally
e marked the climax in am upward mar
- ket
: Prices Likely to be Higher.
= In the present situation, however ID
!, would be premature to assert that tho
:. top has been reached for unless re-
= straint OF some sort comes, either
Through a turn I'm the'tide of affairs or
:. conservative action by our leading
u bankers, we are almost sure to see a.
revival of unhealthy speculation. The
Is chief basis for this opinion Is that il
i business conditions remain satisfac-
IS tory the market cannot forever with
't stand the iniiationary effect of album
W dant money. The circulation of our
national banks has been increased to
al S467 900 900, compared with 1884, 900, 900
l. this time two years ago. Meanwhile
81; our gold supply has been largely aug
al 80 fIta
ID supplies have been increased out OF all
proportion to the growing activity In
business.
Bankers are now looking for very
easy money during the next few
months. a condition which must inev-
,e itably affect security values. Already
some of our large institutions have
been buying good stocks and bonds for
ID temporary investment ON the theory
Z that they would yield better returns
NJ than loans. Had we an elastic our
ID rency system, such as Congress has
" been repeatedly asked to give we should
y be spared the danger Of such excesses,
re and the supply Of money, when super
80 abundant, would contract naturally un-
- til the equilibrium between supply and
demand was restored to a healthy
basis. Such a situation win naturally
facilitate gold exports. although recent
shipments were mainly attributable TO
IN genuine European necessities.
,v Indications point towards continued
~ activity, and in the absence of unfav-
IA orable developments prices may ad-
!. vance It is, however. a chqued and
~ artificial market, particularly subject
~ ed to the setbacks arising from such
conditions. As before said, cheap
money and good business are not bear
arguments. and the facilities for ma
10 nipulatiOn are somewhat unusual For
tunately the public is in a cautious
IN mood and not Over-hungry for high
priced fancy investments Purchases
should continue TO be made with close
discrimination and profits taken on all
pronounced advances.