New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1899-04-09
financial.
The Financial World.

| IN detail the smash OF the market on Thee"
| afternoon and Friday morning The n.u""
| have done that. Everybody was LOOKING o.,
| and everybody was taken by surprise vyh.,
| came. Because II came sooner than exnsc...
| and as II were out of a clear sky. There va.
| little furry in money but nothing OF anv -
count. The banks have II millions surplus CO..
| the legal reserve, which does not inA,..,
scarcity: and which means also that no ,ir -.
| cent rate can be maintained for long n.
| come rather high rates would have N b. Ma,
! for n few days OF the week was known bsfo,.
| hand. so no one was surprised that way y,
| ceiling movement started almost ytho,,
! warning and once started II was hard ,r,y.
| to stop It. At one time Friday morning. th,,..
| lad pretty bad look. Fortunately OWN, ;.
| the easy condition Of the banks the stans,,.
railroad stocks did not move much. ANY A..
who had them, or other acceptable colls..r,,
could get all the money he wanted Hem.
when the liquidation had exhausted Itself whr,
II did about noon. there was a rapid rebound n
prices.
The fact that the smash was most promo ,uo..
I'm the Flower stocks made II important tina,
that house should appear In the market az,
lender OF money. which it did in the afternoon
have Jumped to the conclusion that the firm
had been driven TO make a forced unloadia.
and the effect would have been very bad Ia
appearance az a lender Of money had therefors
a satisfactory moral effect. But when Il wa
all over and people had time n draw breath
the question which everybody seemed n be ash
Ing was: Whose money IL Flower & 60. lend.
ing?" The implied answer was tina, Flower 4
k,fo
gone out" early.
There is much talk about the banks throrirs
the industrials and fractions out OF loans sra
so preciptating the crash. They did not 20
this nearly so much IL talked about n.
real fact is. the discrimination was "a 10 houses
rather than collaterals There were houses
known To be carrying much larger lines than
they ought 10 have. and II these houses
which were called down. When the banks th.7
habitually dealt with called loans on them. they
could not go to new places with the sort o.
collateral they had. so II had n be thrown "a
the market in a hurry. But houses which were
known 70 their banks 10 be working well within
their means had trouble about industras
as collateral. Speaking within the narrow lniu
OF personal experience. one can say that the
banks acted very nicely. and were quite willing
to have a fair amount OF industrials in the loans
made with them.
This is a. II should be- The best banking msa
recognize the fact that the industrial stocks
have come to Wall Street because OF permanent
Industrial development. and have therefore cons
to stay. They have come Just as the railroads
came and from Ike causes. They will stay. ~
the railroads have. The good, the bad and the
Indifferent among them Will have 70 be siftA
cut But the day has gone when bank man.
ager can adopt the free and easy process or re-
fusng them all. and still expect TO keep bis
customers AS rich and very CONSERVATIVE
man recently remarked: the bank which makes
It a rule to refuse to lend on industrials. VIII
GO out OF business"
While Il will be incumbent on the bank peops
10 educate themselves as the values OF INDUS
trial stocks It will be equally incumbent on ths
managers Of these properties 20 let the pubic
have some necessary information about them
Because the Standard oil and the Sugar COM
panies have been able to win public confidence
and yet keep their accounts a guarded secret
It does not follow that the fast multiplying
crowd OF other concerns, with millions upon
millions OF Capitalization. can do the same. Ths
sort Of ability which has made those TWO com
NAMES what they are. is rather rare com
modify. People VIII EtufIdtS "oaA@ ~ No.
what they are dealing IN. Mystery IS a ven
o1activo thing in Wall Street while there Is
buv,ng craze raging: when the craze is sud
denly checked from any cause. there ensues ~
equally frantic desire to get out Then follows
such crashes as that We have just witnessed
II NAV be said ~ the traction stocks. as Metro
poIitan and Brooklyn. that the present prices o.
both are purely speculative Indeed this is &C.
.t,a xph IN have their ml0rey'i
them one pays no such dividend as would begin
n warrant n price Of go for st: the other hasyc
10 pay dividend at all. Consequently ~
nrces are made on expectations. expectati'a
which may or may not be justified by the ever'-
This "a about the same a. a speculative basis
as mystery: and is liable 10 produce the sans
wide and rapid fluctuations I'm prices The late
smash will necessitate in the future. muca
larger margins on these stocks than have her''
tofore been asked. In respect To an old STOCK
Ike Manhattan. Il remains to be said mercy
that the rapid advance in its price mahs ID
authorization OF the announcement % the ar
rangernent with the Third Avenue road. VA
totally unjustifed by anything in the manage
ment ITSELF and some OF the most suos'an'''.
holders OF Manhattan say So II is goo'
thing Of course; but not good enough 10 put Nv
stock above 100.
The usual course Of a market after srnsss
and rebound. is TO have short feverish sp'
and then settle into comparative dullnes !
requires little time 10 get new breath II VII
60 on again later. Because some more or s'
serious mistakes have been made In the hsAa
ling of the market, the Industrial conditions
the country have not thereby been cnahs7S
And the greater speculation Will he in the ID
dustrIals The idea that the present experenr
will throw them out Is erroneous What w..
do. is to make people a little more CAUTIOUS
more disposed to ask OF any OF these s'00A'
what they always ask OF a railroad s'0~
What is the company earning IL can .
" have escaped attention that certain O.
industrial stocks which had not particpa'N
the boom. were very little moved in the sns-
This because their market price was IN 90.
relation to the earnings Of the properties
rule will hold good for industras as Wen
| railroads; in which latter corporations Wv.