Evening star. [volume] (Washington, D.C.) 1854-1972, 1894-10-06
A Comprehensive Review Of the Con-
diticn Of the Market.
RECOVERING FROM LAST YEARS Panic
The Situation on the Whole is
Satisfactory.
! G O O d O L T l. Q O X

After prOlongei period OF Gul.nCSS, Que
primarily to the monetary stEirgency
precipitatel by silver agitation, ana latteriy
to the summer vacation season, the marke;
for local securities shows some indications
of awakening activity.
In chronicing the retrograde movement
Of values in the various money c"nicrs of
the country and the widespread Iis:rus; of
corporate and individual credit but little
space has been given to the consiiera ton
Of similar adverse influences al home. The
provcrbiaI conservatism of District ins,itu-
lions was never more marked than during
the summer of 1898, when financial disso-
luton Was almost hourly occurrence.
Colla;erals were carefully scrutinized, wide
margins demanded and interest rates
! marked up TO the full legal limit. Would-b
borrowers criticised iii harsh terms a policy
conceived from an abundance Of caution.
and attributed their harishps TO individ-
uals. or set of individuals, rather than
to the unsettled condition OF the times.
DehDcration and experience combine in vim
uicatinS those to whom such criticisms
were addressed and IN, stability OF our in
stitutions today Is a ftattering testimonial
of approval.
4 Reaction I'm values.
The liquidation made necessary by a
steadily increasing interest rate and a re-
stricted borrowing capacity naturally forced
a substantial reaction in values. Forced
selling is rarely profitable, and in the pres
ent instance stopped little short of disaster.
Money was essential to business enter
priscs. and securities were frequently sac
rlflcei TO obtain ii without regard for pre-
vious standards of value. Real estate OBJ
hgations, more tnan any one cause, were
responsible Tor selling of this character.
1t has been urgei In some instances that
in no iStr rirt NOR
sentmentaly iniid ted. and that the subse-
quent decline was in some measure at
tributable TO natural reaction in the direc-
tion of intrinsic merit. Without discussing
this view of the situation. a brief review of
the decline and the percentage of recovery
under improved business conditions will not
be unprontable at the threshold OF what
usually proves to be the season OF greatest
activity in financial circles.
Decline and Percentage of Recovery.
During the first four months Of 1873 ac-
tivity on an ascending scale centercd large
ly in the stocks of the several trust COM
panies. Prices were steadily advanced. in
sympathy with a good speculative and in
vestment demand, to a point beyond ali
previous records. 1t may be. remarked, by
way of parenthesis, that strictly speaking
the majority Of the trading in the local
market belongs to the investment class tie
field OF operations being too narrow 10 en-
courage speculative accounts.
The enthusiasm due TO fortunate ventures
ut lower prices, and the feeling of local
pride engendered by the iiourishng Condi-
ton Of these comparatively rev enterprises
mad carried values up from ~ to 6.l per cent
above par The pioneer Institution char
acteristicaiiy brought up the conservative
end or the advance. In October one year
ago, after private attempts to dispose of
these securities with varying degrees of
success, and wide discrepancies between
sales. liquidation in the open market re-
fNH barr
premium were totally obliterated in an un-
warranted sc rimbie to convert securities
INTO cash, after an alarming crisis had been
successfully averted. A premium Of A. per
cent was reduced to 16. and one of ~ re
duced TO ~. In the year that has elapsed
since the recording of these figures rene
dlai lnnuenceS have been at work with rh,
result mat irom % to 30 per cent of the
losses nave been recovered. At the present
time these securities are strongly held ard
Whlle no remarkable advance is impeuding
the recognized tendency of the marked is
Cerned.
The Street Railways.
In the street railway department the af
fairs Of the Metropolitan road have at
tracted the most attention by reason of
congressional legislation regarding a
change in motive power, a law suit in re-
lation to taxes and the recent change in
management caused by the death of its
chief executive. The history OF the fruit
less and expensive experiments with stor-
age batteries IS too Well known to Star
readers to need further ANALYSIS Suffice
II TO say that the funds realized from the
sale or half million bonds, secured by an
equal amount Of the capital stock of the
company at double its par value, mas been
exhausted and the motive power u,,-
changed. AT a meeting of directors hrlI
on "Wednesday last a resolution authorizing
the issue of Sl.ITNO bonds was passed in
order to provide funds for the purpose of
putting In an underground electric plant
with provisions for a cable should the first
device fail. In April. lS.s;. the month pre-
cedinS the panic, the bonds of this COM
pany were selling at l3" and the stock at
l2I. In October of the same year the price
OF the bonds had dropped to 1ol and the
stock to II Ia. and the latest recorded
sales We're l0l and 81 IA. respectively. The
present management of the road is relied
upon to utilize all the recognized advan-
tages Of a valuable franchise and put the
road on sound financial footing.
The listing OF s5ro."U first mortgage C
per cent bonds due 1914. issued by the Co.
lumbia railroad to defray the expenses of
cabling that road is perhaps the second fea-
ture of importance in railway circles. The
issue was more than one-third over sub
scribed, which Is direct evidence of its de-
STABILITY by investors and already COM
mandS substantial premium.
The securities of the Washington and
Georgetown road reflect a per cent reiuc-
cally no change in the price of the stock
as compared with last Octobers prices
What activity there has been in the re-
naming lines has resulted in q moderate
addition to values.
Gas and Electric Light Companies.
The stocks Of the Washington Gas Light
Company and the United States Electric
Lighting Company have recorded sat,sfac-
tory gains for the year. the latter's gain
as represented by prevailing prices being
fully 10 per cent Both of these stocks are
favorites with local fnanciers and invest
ors. and have repeatedly rewarded patient
holders with handsome profits and extra
dividends.
In bank stocks the important changes
have, as a rule. been confined to the newer
Institutions. Stocks OF this character and
dignity are rarely active, being 80 closely
held, and often reflect wide variations in
value between sales. At present the pros
poets Of dividends about the first Of the
year encourage a belief In higher prices
for such stocks as have not yet lnaugurated
this method Of reimbursing their holders.
Insurance Stocks.
The insurance stocks by comparison with
last years rates reflect fractional declines
in price. and q noticeable reduction In the
volume Of business There have been sew
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