Richmond daily palladium. [volume] (Richmond, Ind.) 1905-1906, 1906-01-09
UNDUE SPECULATION
HENRY CLEWS NOTES PERSIST
ENCY OF SPECULATIVE
DEMANDS.
Owners of Unseasoned Securities
Seem Determined to Force
Speculative Craze.

New York, Jan. S.-The year 1906
opens under most favorable auspices.
General business conditions are salts
factory and ought to continue so, at
least until the next harvest. So far
as the stock market is concerned
there are but two dangers, and these
are rather serious ones; an over ex-
tension Of credit and the fostering of
undue speculation. The money
squeeze is now over, and from now
until the middle of March money
should remain in a comfortable easy
condition; but the recent stringency
in the money market is proof of the
need Of an elastic currency system
and the rather unwelcome demonstra-
ton of the persistency of speculative
demands upon our banking resources.
Unfortunately, the latter are very
frequently under the domination of
men whose interests lie in the direc-
ton of still higher prices on which
to unload their surplus stock. In
fact, this power of speculative inter-
ests over the financial institutions is
one of the worst dangers in the situa-
ton.
While the public has lately ventur-
ed into the market more boldly, it
has, nevertheless, thus far only par
tally relieved the rich holders of
their surplus stocks. Conditions be-
ing highly favorable, the original
owners of unseasoned securities, es-
pecially the industrials, seem deter
mined to force a speculative craze in
order to unload a portion of their
burden upon the public. Whether
they will be successful or not future
events must determine. 1t is to be
hoped that the public will not jump
too eagerly at the bait
thus offered, and it is
also highly desirable that bank
ers should more generally insist upon
a conservative policy and discrimi
nate sharply in the making of loans.
Further than keeping these caution
airy ideas steadily in view it seems
almost useless to resist the speculat-
i've craze. Prices of the best securi-
ties are so high as to be beyond ordi-
nary investment requirements. and
this year there is a smaller proper
ton of money coming into Wall
Street for investment than in previ-
Gus years; hence large sums are go
ing into real estate and a variety of
other new enterprises. This of itself
is suggestive incident. All indi-
cations point to a fresh burst of spec
ulative activity. We can do no more
than impress upon our friends the
great necessity for caution and sharp
discrimination particularly against
the low grade industrials and cop
pers, many of which are ridiculously
inflated One reason for anticipating
a wider degree of activity is that
prosperity is so marked throughout
the West and South. The agricul-
tural classes are not only out of debt
but have money in the bank, and the
same is true of the laboring classes,
both Of which are easy victims to the
many get-rich-quick schemes which
are sure to be foated at such times
as the present. History will simply
be repeating itself; for all prolonged
eras of prosperity have been capped
by speculative debauch, and this
one is not likely to be an exception.
The year 1905 was record breaker
IN almost every respect, and it now
looks as if the year 1906 may be a
record breaker in regard to specula-
tlon-however much that may be re-
GREETED. 1t will doubtless be pushed
to the breaking point, which usually
comes when least expected.
The foreig on situation continues to
improve. The Russian Government
apparently has the rebellion under
control. and if the Car could but
rise to the occasion and grant his
people the reasonable demands which
they have made, the Russian Emnirc
might be re-established on the basis
ct peace and the world enjoy a new
period of progress. Some little dis
trust is shown over the strained YeIa~
tlons between France and Germany
which have existed for some time
past. but thus far there has been moth
ing seriously threatening in this re-
spect. Money abroad is generally
easy and confidence improved. The
local money market will right itself
If left alone. There is some tn,k o.
Government assistance either through
Secretary Shaw's intervention r. in
connection with the Panama bond IS
sue. Neither is desirable. Bank
leans have shown a considerable con
| traction. but our surplus rpsnr,-a i