The Cairo bulletin., 1905-12-25
SOURCE OF DOUBT
IS HIGH PRICES
TO WHICH MANY SECURITIES
ARE BEING PusHED,--HENRY
cLEWs SOUNDS A NOTE or
WARNING.

culties in Chicago are an imitation o
what might be repeated elsewhere
4 Serious trouble was only prevented il
i that instance by heroic action, tn
necessity for which showed TIL
seriousness of the case. The recent,
suspended Chicago institutions | fea
are NOT the only ones which have beer
lending more freely TO the large CAPT
talists who dominate them than ordi
nary business prudence would permit
and unless something occurs to check
| this SORT of extension of credits more
trouble is likely 10 follow.
| Another source of doubt is the ex.
| tremely high prices TO which many
securities are being pushed. Bold
spectators with unlimited capital be
hind them have been successful in
forcing their favorites to unreasonably
high levels. BY means of adroit
manipulation they have induced the
public to enter the market more
freely than for many weeks past, and
by allowing the earlier public buyers
10 make some profit they have natur
tally been able 10 encourage and widea
the new buying interest. There has
no doubt, however, been much raaliz-
ing under cover, and some of the rich
and heavy holders of securities have
been freely unloading during the past
week or two. Stocks whieh are selling
at undnly nigh prices are 100 well
known to require mention, but ar
their present altitude they are a
menace TO the market and should be
carefully avoided by either specula-
tors or investors Another element
of risk in the market Is the sensa-
tional activity in copper stocks. Here
TOO, the process of unloading upon the
public Is actively at work and all sorts
of 'qpestional properties are selling at
unreasonable prices In face Of this
reckless speculative activity is the I'm.
condition of the money
market. Funds are still too scarce for
speculative purposes. and we are in
imminent danger of sharp squeezes
In rates before the close Of the year.
When many stocks are selling out Of
all proportion TO their intrinsic value:
when credits are extended to a de-
gree never experienced in the history
Of III country, and when money com
mands such exorbitant rates as have |
been paid during the current month |
II is time that some restraint was
placed upon the speculative excuses |
that are now threatening the Street" |
Bankers will soon be obliged 10 dis |
more closely both as to col
lateral and to borrowers. The situation |
Is such that If any further trouble |
develops we are likely TO see a sharp |
Very little confidence exists |
in the present level of values; and |
HAT means rush 20 sell and take |
paper profits as soon as II is gener-
ally recognized that the turn has been
There is no short interest in
he market of consequence TO support |
values in such a contingency and the |
investment demand will remain
very limited factor while prices con
inue at the present high level. Money
s already freely seeking other chan
lels of investment, going into real es-
ate or other more profitable direc-
ions
As we have repeatedly stated, an
,ther danger confronts the market
which appears 10 be constantly over
9oked, and that is the strain upon
Russian credit growing out of the
chaotic state of affairs
Which there exists. Only by aid of the
most powerful bankers in Europe is
| still more serious break avoided in
Russian securities. II is TO be hoped
hat such efforts will be successful
md the collapse of Russian credit
lyerted. Should disaster occur how
yer, II IS folly to imagine that the
Sew York market will escape It's
Elects, for London would be called
lpon 10 asst Paris and Berlin, and i'm
rider to 10 so American stocks would
re the first to be sold.
As the year draws To a close Ii is
'asy 10 find abundant material for
elf-congratulation. The country has
a year of unparalleled
business activity, all records being
'assed both as To. volume and profit.
such an era has begotten
many unfortunate excuses. Business
Methods have become less rigid; over
confidence has taken the place OF or
inary caution, and continued abuses
I~4 II
~ with a setback leading to an era
f depression At the same time. how
yer, there is no occasion whatever
or taking discouraging view Of the
uture. On the contrary, there is every
eason for hopefulness in the business
World. Our farmers. who are still the
acklone of the country, are enjoying