Las Vegas daily optic. [volume] (Las Vegas, N.M.) 1880-1908, 1906-01-03
rHG NEW YEAR FINANCIALLY.

49,
In a letter TO The Optic published
yesterday Henry Clews, the New
York banker reviewed tho year past.
Following are his views regarding
the financial outlook Tor 1900,
What are the prospects for 1906:
That Is u question more difficult to
answer than usual. The present up
ward wave has been In progress since
the panic Of 1899. Judged by ordi.
,naty standards OF measurement. a
reaction Is already overdue, and the
tide should be turned In the opposite
direction, Already there are symp-
toms OF the boom having reached It's
zenith. Fer instance. q speculative
fever liz rising In real estate: money
supplies are running low and firm
rates are ruling throughout the world
and are also In the midst OF an cpl.
demic OF loose and fraudulent busi'
ness methods which often accom-
panies the climax OF . prolonged up
ward movement. Real estate 10 gen
orally the last market v feel the
xltmuto9sof . boom. either beca6hett
has bec0me the safest form Of Invest.
ment. or because prosperity liiduces
many - buy their own ,homea, os b.
cause development Of new inddsttIdI
enterprises stinulates land yaiues
money supplies have already been
much exhaustsr ~ the too rapid
turning & capital frou floating into
fixed form. and On era Of loose prac'
ti6es ,tSems , Unavoidable It = time
Wien III sorts o. sstrieh-quick'
sche41s prosper and are easily foist.
ed ut6n ID tnnoceat pSbtic. n these
respjcts II appsays that We are neas
n ut u : period - seaetioa. But
TIM ~ not a. MANY securities are
s(illns at sMessitsly HIN prices and
fielding about3 to I per cent at pre-.
sent prices. A high degree Of infla.
fion exists ID many securities parti'
cilarly IA the. industrials. the conf
mon stocks ef which frequently re.
present nothing but water and YET
are selling all the way from 30 20,
so and upward. Under present ex.
ceptional conditions these concerns
ere . often able to make e~xorbitapa
profits which renders It easy to see
how the public are deluded into re-
lieving original holders Of their sur
plus stocks. For some years II look
ed 90 II the rich holders Of these n
dustrials would be Obliged TO retain
them permanently, and II II . matter
Of regret that present conditions now
favor their distribution among the
public. Many Of the industrials are
still Ia m intrinsicaliy weak condi
ticn. They are heavily overcapitai,
ised and have not yet stood the test
OF adversely. Ney competitions from
more modern plants 10 constantly
growing. aadt their ability to control
the mArket--ons Of the prime objectl
Of the trust jmethod-ls likely to be
seriously disputed when the reaction
com9aI and when the modern estah'
IIishrhents prove their, superior com
petitive atilities. This initiation II
mo stock market Il really the weak
ct point IN the Thole situation
Credit has In many case been IN
duly. extended, and some Of our bank
Ing institutions are loaning too heav'
lily Oh questionable collateral. Bank
loans In New York stand at about
81. 900. 900, 900. which " practically
double their amount ten years ago
The difficulty ts Wall Street has over
discounted the situation; and It would
not be surprising II some degree Of
contraction OF readjustment were en-.
forced during 1906. the speculative
situation on the Stock Market being
anything but satisfactory.
While these are the facts which
suggest reaction and consequent pru-
dence, there are elements In the situ-
alton which do not support the theory
that contraction has begun. On the
contrary. there 7 many good rea.
sons for anticipating 4 continuation Of
present commercial and industrial
activity, at least until the next har-
vest. In the frst place 4 must be
remembered that al reactiohs or pAn-
lee have had their b~eginninss ID over.
production. Not until there has been
10 overpr6duction Of securities, a
merchandise. or Of the mass Of utili.
lies which 10 to satisfy human wants
d there any reason to fear perina-
rent reaction. When overproduction
becomes. general then readjustment
must also become general; but where
are the symptoms of general over.
pr~oductionl We haze not built, too
many railroads during the past de-
cade, nor issued too many securities.
Good Investments ara very scarce.
Deock @nrkek. condltloees aeponstrate,
hat. NasItoad usinaee6631 ION. 2
bur ratfteads are evsrtaxtd that
lectione OF the country ard badly
need Of enlarged ifsciiities. and That
31dxas ~ 4lisas An E11ssets
point 10 4 renewal Of railt0ad~ Oultd.
lng, particularly west Of the Mississip'
n. where present tpcilitiea are made
ouase. n this decsdV there has been
none q the excessive railroad build.
M wllcor RrecipstAtsd pssvaeusl cfs'
sksI The railroads therefore must BE-