New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1901-06-30
financial.
The Financial World.

preparations for the large July Disbursements
the money market through the past week has
been only slightly disturbed For an hour or
so. on the day of the failure. the call loan rate
did up as high as 10 per cent with an
average for the day Of perhaps 10 per cent; but
! for the whole week. the average has been about
per cent. This is pretty good showing under,
the circumstances Yesterdays bank statement
was about expected. There was ten million
decrease i'm the loan item and the surplus re-
serve was increased. instead of decreasing as it
has for some time past. The stock market grew
stronger after its appearance.
The general situation affected by the fall
ures which have startled the public was
expressed by conservative investor and busi-
ness man. ut will lake a good deal more" said
he. than the smash Of the Seventh National
and Marquand Co, to offset the prosperous
conditions which are making this market" A
small bank an adjunct to a firm OF
speculative brokers. said firm being made up Of
two young men inheriting a good name-this Is
the situation a nutshell To suppose, that
any one in actual authority in the Seventh
National was ignorant Of the sort of business
the bank was doing with Marquand & Co, is
to suppose the impossible. It is an old story
We have had such things often enough in the
past to be familiar with them, and know be-
foTehand about what will be shown when the
search light of legal investigation is turned on
the causes of the failure. 1t will be noted that
the assignment of Marquand & Co. was made to
an officer of the company the promotion Of
which broke the firm and the bank. That also
is a not unfamiliar occurrence
The assignee was quoted yesterday as saying
that the loans of the firm are secured by good
collateral but expressly made exception of the
securities held by the broken bank. What this
means, apparently is that regular lenders re-
fused shawmut Railroad bonds collateral.
| and other of the firms wild CATS which in con-
sequence. went to the bank-a significant COM
ment on the remark above. that the bank was
run as an adjunct Of the firm. Satisfaction may
he derived from this. as it indicates that the
affair is concentrated
The probable outcome will be that II there Is
anything about the Seventh National worth
saving. some other institution will take it over:
that some one more persons will have to
stand criminal trial and so to Jail: that the
Shawmut Railroad Company will go into the
hands of receiver. and the property will final
~ find it's way into possession of some one Of
the great railroad companies-at that com
pany's own figure. Promotion of small Wild
cat railroads used to be quite an industry some
twenty years ago. OF late years. the industry
has gone out of fashion Industrials have taken
their place. They cost less
The stock market was very naturally rather
depressed during the early part OF the week II
oesan 10 revive little when. after the failure
; Of Marquand & Co. the extensive line Of stocks
they were short OF. bought in for their ac-
count. There probably not inconsidera-
BILE short interest made by people who knew in
advance what coming. and put out short
lines in anticipation of bad slump. 1t did not
come. however. Here and there. losses Of from
three to five points We're recorded between Mon
day morning and Thursday afternoon; but the
market a whole stood the strain we'll giving
proof again that the big men and large corpora
tons hold the stocks. When the turn did come.
the list rallied easily. although irreguIarIy.
Two leaders in the rise were ct. Paul and II
hnois Central. AS to the former it is we'll known
that the stock has become largely concentrated
in the hands of the Rookie Teller party; who are
very sangune about the future. Illinois Central
is probably not held in large blocks; il has Deem
too many years bought and sold purely as an
investment security which usually results in
the stock getting scattered in small lots among
investors all over the country. Speculative at
tention is getting somewhat attracted to it now.
because of the comparatively low price at which
the stock is selling-ow. that is. compared with
the earnings Of the property and the prices ot
other properties not earning so much
The figures given in this column last week
we're interesting this point. They showed
that FIVE years ago. when all railroads were
running low earnings. the Illinois Central
came very close TO earning \ per cent on its
stock, based the common ratio OF 66 per
cent working expenses; while none of the other
leading roads mentioned came anywhere near
this. AT this time when the gross earnings
have increased heavily, the same ratio would
give earnings of nearly rs per cent. But the
Illinois Central spends more than 66 per cent
about 90 to 20. At this figure the earnings will
be between IL and - per cent IT is enough 70
point out this indicate the good margin there
is for an advance in the market price Of Illinois
Central stock.
Speaking OF ratios OF expenses. u is worth
while 10 note that the Nickel Plate securities
have for many years been kept very low
through the company taking about everything
over what required for fixed chs rges to
spend on the property. Working expenses have
been as high as So per cent. This process OF
building and rebuilding has been going until
the road is now all reconstructed; and the time
cannot be far of when. the reconstruction work
being completed. the cost Of working will
down to normal fgures-which means dividends
on each of it's three classes of stock II viii be
remembered that the vanderbiIts pursued the
same policy with the Omaha road and many
people got very weary carrying the stock while
the harvest was waited for. the same as many
have with the Nickel Plates. But the harvest
came abundantly at last and it will come with
the Nickel Plate. which is another Omaha
The Atchison stocks continue very strong.
the earnings the road is making. and what it is
expected TO make the business in sight The
preferred stock looks like purchase It Is pay
ing it's full ) per cent now and taking other
things into consideration, it ought to sell above
ITO
hot