The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1905-03-20
CLFWS FORECAST IS
DEEPLY OPTIMISTIC
Predicts Large Volume of Bust.
ness and Good Labor
Conditions
Special to The Globe

Special to The Globe
NEW YORK, March 1S.-While time
money continues easy call loans have
SHOWN s,o; relatively sharp advance. owing
manly ma to the withdrawal of about s13,-
Oov,O0O OF government funds from the de-
positary banks. This. and the fact that
preparations for April settlements are
now in order, impaired a firnfer tone TO
the money market and strengthened the
impression that the surplus reserve would
out Tor brief period. No permanent ad-
vance in money rates is to be anticipated;
put this temporary hardening in rates was
quite sufficient to check the advance in
stocks and to induce considerable irres1I-
larity in values. a condition that is likely
TO continue until bank reserves again be-
gin TO rise. The ease of money abroad is
favorable to this center, and any further
advance here would be quickly counter
acted by our bankers securing accommo-
datlon in London. Towards the close of
the week, however, LIQUIDATION became
quite pronounced and the market showed
q declining tendency. This was due to
nrmer money, to the prospect of a poor
bank statement and to the likelihood that
monetary conditions will not improve until
the middle of April. The situation at Paris
also al created uneasiness; and the report of
the United States Steel corporation was
not considered satisfactory in view of the
immense business that concern has re-
centiy been transacting- The immediate
outlook at the close was for still lower
prices.
General Conditions Good
On the other hand general conditions
continue very satisfactory. Bank clear
lngs testify most emphatically to the
ACTIVITY or general business. In the sec
ond week of March clearings at seven
principal cities increased over so per cent
compared with last year, New York show
ing a gain of 30 per cent, Boston 20 per
cent. Philadelphia 80 per cent, Baltimore
20 per cent and Chicago 50 per cent. The
gains. II is noteworthy, are widely dis
trlbuted over the entire country, no sec
ton falling behind. Speculation may have
something TO do with the heavy increase
at New York, but not much, and certainly
has not been an important factor else
where. These figures prove beyond cues
ton that very heavy volume of legiti-
mate business is being transacted in all
parts OF the United States.
IhuS far there are few signs of over
doing or overspeculation. and it seems
quite likely that, if the country be favored
with another good harvest, we shall enjoy
another good business year. The wonder
full growth of the country must always be
taken into consideration. Our population
very large this year. Labor is we'll en-
pioyed at good wages. Prices of COM
modlties are generally very high, owing
partly to high costs of production and
partly to production not having overtaken
consumption. These conditions offer Spe-
cial inducements to new enterprise; and,
capital being plentiful at low rates while
good investments are scarce, we seem
destined to experience continued business
activity until supply OYertakeS demand,
until our surplus funds are exhausted or
until some unexpected disaster checks the
onward current. AT present no serious
setbacks are in sight, the situation gen
orally is sound, the outlook hopeful and
confidence strong.
While such Is, the situation there is lit
tie chance for anything more than a tenn
porary reaction in stocks Prices are al
ready so abnormaly high that both in
veStors and spectators are disposed to
leave the market to the trading element.
Moderate liquidation would really be ben
ef1clal, since 1t would relieve the market
of its monotony and introduce much
needed fresh life and activity. The diff
Guilty OF finding good investments at at
tractive prices is strikingly shown by
the quickened flow of capital into real
estate. In previous years this turning of
capital from securities towards real es-
tate has usually marked the climax of
boom. In this case, however, 1t would be
hazardous to make such a prediction, the
situation being so exceptional. Be this
recently made in real estate, not only in
this city but elsewhere, are very signifi-
cant. and have been prompted more by
the difficulty of finding profitable invest
ments than from any sense of distrust.
Unless all signs fail, there is going to be
an active season in real estate and build
cases there is an actual scarcity of houses
and shelter, the advance in labor and raw
materials having materially checked
many classes of construction: Had 1t not
introduced into large structural work
building would have been hampered even
more seriously than it has been.
Watch Foreign Trade
Our foreign trade shows tendency
that of increasing imports and decreasing
eXportS-which will bear watching. In
February our imports reached SOB. 600, 900
the highest on record in spite of 1t, be-
ing a a. short month Our exports were
of imports. Compared with the same
month last year, these figures show an in
crease OF s13. 100000 in imports and a de-
crease of over SO. 600, 900 In exports. The
gain of imports is easily attributable to
good business conditions here, while the
loss in exports was chiefly due to dimin
ished shipments OF wheat and the lower
ports to rise and exports to fall, If con-
tinued. must soon exert an important in
fluence upon our international exchanges.
During the twelve months ending Febru-
airy IS the excess of exports was only
1851, 100000, the smallest amount of the
last six years. Five years ago at this
time we had an excess of exports in the
same twelve months aggregating 1872, 000,-
600. Unless this tendency ceases we must
soon ship either securities or gold in set
Element.
The Russo-Japanese war is still an in
direct factor of importance in the stock
market. Sooner or later Russia must
make peace. No doubt she is vastly more
ready for a settlement than is acknowl-
edged. provided humiliation could be
avoided. Fortunately. the banker now
holds the dogs of war in restraint, since
the present threatening condition of the
Russian empire renders the placing of
another loan even in friendly France very
problematical. France now holds about
81, 700. 900, 900 of Russian government
bonds. and. according to Lord Rothschild
the total French investments in Russia
is between $4,000 100000 and $4,000 000,-
600. France Is certainly carrying a
tremendous hazard. and it can readily be
understood that anv collapse of Russian
credit would precipitate a panic in Paris
capable of shaking the money markets
of the world. France. Russia's best
friend, must therefore be strongly for
peace. and 1t looks as IL the oft despised
money bags would be a more potent in
f1uence for peace than the well meaning
governments which have been anxious to
mediate. Neither Russia nor Japan IS
near the point of exhaustion. but it will
be fully six months before Russia could
put another effective army in the field
and during that interval much can hap
pen that will work for peace.
Henry Clews
CLOTH MARKET SHOWS
DECLINE IN BUSINESS