Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1906-01-29
HENRY cLEW'S LETTER.

HENRY cEEW'S LETTER. 4
Speculation continues on an active
ard somewhat feverish scale; indf.5
cations multiplying daily that the
market is rapidly approaching a turn
ing point. Efforts to force prices to
a still higher level continue with lin-
aEated vigor, and stocks are being
bought iby the public with increasing
aVidity and with little regard to in
trinsic value. +. Meanwhile the buying
fever is being carefully nnrbured, and
is not confined to New York, but
extends to all parts of the country; q
much larger proportion of stock ex-
change business today being over the
wire than ever before. These heavy
speculative movements are often be-
ing conducted by an entirely new
and wealthy class of operators, many
of whom are young and inexperienced
men with lots of money, plenty OF
nerve. but slight experience and i'm
4 mature Judgment. On the other
hand, it is very significant that many
OF the shreWdest and WeaIthiest OPP
eiators of long and tried experience
\ have been steadily selling stocks
Even investors strong boxes q have
been much depleted during the last
Eaenth for shreWd buyers have Tecog-
snlzsd the unusual conditions, turned
their holdings into cash and are now
awaiting an opportunity to repurchasel
considerably lower Level, which
will surely develop before any great
length of time. While it Is quite pos
3sible that prices may be carried to a.
higher level before reaction sets in,
The technical position uff the market.
growing Increasingly hasardosis:;1
and, since stocks are rapidly passing
Into weak hands. the market stands
exposed to a severe break as soon as
any severe strain is encountered, such
as renewed stringency in money, Or
unexpected disaster of any kind. Just
now the financial skies are cload4ess,
ard the only unsettling features are
the frequent react ions induced BY per-
sistent inside realizing The failure
az Union Pacific to increase its divi-
dend to SIX per cent is a severe dis
ointment to those optimisti caIly
i1eiined The road 1t is claimed. has,
been earning over ten per cent, and
predictions were freely made that the
dividend would be advanced to- 6 per
cent This stock has recently been
selling over l6o, Whach, considering
forthcoming new capital issues and
that 1t may hot pay more than s per
cent, is price much beyond its real
vgIue ST. PalnI is a per cent stock,
selling at 100, with a large amount
OF new stock Forthcoming Pennsyi-
yania is another IS per cent issue.
selling at 1A7 with no prospect Of a
I better dividend owing to heavy In
creases In capt. lization. Reading is
a per cent stool, selling over 100
at d time when eonsump OF coal
! hiss materially decreased Such in
stances OF exaggeration IN values
could easily Be mutt ipaied. but these
sufficiently demonstrate that there IS
no justification to be found IN the
present high level OF the stock mar
4 l.et. &. Ssa
So far as the Immediate situation
rs concerned III the stock market we
cannot conscientiou advise the pug
chase Of stocks Quite possibly mani
puIation may force prices here and
there to a higher level, but It is pracEi-
cSlIy certain that current liquidation
viii continue until all Of the larger
Interests have parted with their sur
8 plus holdings When that point Is
reached there VIII be a. scramble
among the little fellows 10 set out
and the market VIII be left to take
care of itself with no snort interest
\ to- check the decline 1t viii then
ne Il ease Of sethe Deyil take the hind
moss. !. The market IS not yet in
shape for short sales, and outside Of
technical conditions the general stir
aflon IS satisfastory Business Is 40
4 fsse and ii sound condition Our
national resources are being rapssizly
developed, and this fact is the bed.