Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1907-03-25
PANIC MAY Be BENEFIT
Henry Clews, New York Banker,
Says Good May Result From
Stock Slump
GOOD CROPS, NO HARD TIMES
Business Will be Conducted on a
saner and sounder 1asis-Non
Trade May be Injured by Stopping
Of Railway Improvernents-GeneraI
News.

New York, March 25.--Henry Clews,
the banker, reviewing the recent col
stocks and its effects on business,
says:
Last weeks collapse on the stock ex-
change left the stock market in an I'M
settled and feverish condition. That
disaster was partly the result of eco
nomic conditions and partly the result
of a break in the huge speculative
movements inauguratetl in the last
quarter of 1906. The large dividend
payments on Union and Southern Pa
clfic, which excited so much comment
at the time, were the basis of extraor-
binary speculative operations conduct
ed simultaneously in London and New
York. The parties conducting these
operations were highly successful in
their earliest stages; and large quanti-
ties Of these stocks bought at low
prices We're probably distributed dur
ing the first part of the campaign in
both the domestic and foreign markets.
Subsequently, however, these oper-
ations were not entirely successful, be-
cause large amounts of stocks were
still held by the leaders and their
friends, for which only very limited
market could be found outside of their
own buying and selling to each other.
The public as whole had kept out
of the market with Unusual persisten-
cy; the widespread dis'trust created by
the exposures of high finance and the
stringency in money beinb unquestion-
ably the chief causes of this reticence.
The strain on the leaders was intense,
and was seriously aggravated by high
rates for money. The pressure of the
railroads for new capital and the tre-
mendous outpouring of short-term
notes after January list proved to be
the last straw. In a situation of such
tension only moderate shock of some
sort was necessary to precipitate a
collapse. Such a shock came ostens-
IDLY thru the rising hostility of state
legislatures towards the railroads.
Railroad managers and the heads Of
large corporations became seriously
alarmed at this aggressive attitude.
For this they had themselves chiefly
to blame, owing to rast misdeeds and
a prolonged disregard of public opin-
ion. With confidence in the stability
of values weakened--first by fear of
natural reaction and second by fear
of political retribution--a situation
was created that readily explains the
to1,
week ago.
CAS- a result of that decline some
very serious losses have been incurred
by large holders of securities. For
tunately, the public have suffered to
a very much less extent than usual;
hence, the remarkable absence of fall
ures.
at is too early te, calculate the eff
feet upon general business of the stock
market decline. Our railroads are al
ready starting policy of retrenchment
which must react upon the iron trade
and upon labor Many of our rich men
also who are accustomed to take the
initiative will either thru necessity or
caution follow on the same lines. With
a check to enterprise generally and Il
lessened lemand for labor, 1t is inevi-
table that business will in time feel
these movements. They may not show
themselves Immediately for much of
the work projected must be finished,
but later on it need cause no surprise
if there should be a moderate slacken-
ing in the headlong pace at which bust
mess has been going for the past few
years. If such reaction can be kept
within moderate bounds and the coun-
try brought back gradually from abb
normal conditions to those which are
more normal the result would really
be beneficial inasmuch as our situation
will be stronger and sounder. This isl
going to be a critical year. If We have
another good harvest serious reaction
may be deferred, if the harvest should
not he satisfactory, then we must look
for further contraction in all depart
ments of industry and finance. The
latest reports concerning winter wheat
are exceedingly favorable"