New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1902-11-16
financial.
The Financial World.

pose thelS HdO uecH a panic, OF something
IT, in Wall Street. Nothing OF the kind ba,
taken place. There have been some sharp a.
elines one specially sharp Friday. fonoVaa
yesterday by the customary rebound BeVop.
this there has been nothing. When the pFeaa,t
rebound has exhausted its force. there win H.
more declines.
Some house cleaning viii have to be done ~
Wall Street; and it seems to be considered IN
certain influential quarters that this is as GOOD
a time as any to bring it about. Some of the
work has already been done-the transfer OF a
large block OF Northwest stock at private sale
being part Of il,
The traffic situation" said prominent bank
er yesterday. speaking with unusual empbasf.
"the traffic situation is good as good as any one
could wish, but the financial situation is bad"
The financial situation dominates the other. The
relief given by the Treasury Department was
timely. and effective for its purpose in avertinr
a serious crash. 1t could do no more The ne
eessity for contraction of the enormous volume
Of credits still remained; and the liquidation
which this contraction involved has been pro-
eeeding, and is not yet over.
The financial situation viii be healthy again.
and the foundations be laid for another bull
ACKNOWLEDGEMENTS different from a feverish
rally after break-when il is again possible to
borrow time money freely at moderate rates It
is not possible to do this now, and il is not very
clearly In view when it will be.
One effect of the changed money conditions
has been to dissipate into thin air dreams Of a
far ranging control OF western railroads. having
it's starting point AT Rock Island II is gradually
coming TO light that some of the most powerful
railroad interests in the country were much dis
quieted when the Moore Brothers scheme de-
veIoped FOR the control Of Rock Island; nor were
they any better pleased when it appeared that
the same combination was stretching out FOR
control of neighboring roads
This stretching out involved enormous borrow
ings, TO buy stocks at prices which had never
been seen before in Wall Street. The vulnerabls
part Of the scheme was that 50 much OF it had
to be done on borrowed money This was where
it was possible 20 strike it; and when the ex-
pansion of trade. the general rise Of prices. the
activity of speculation. and the customary de-
rnands 20 move the crops. all united to deplsts
bank reserves. the opportunity came to force a
little Of that house cleaning before referred to.
When the Rock Island scheme was first
brought out a note of warning was sounded in
this column that it contained the germs Of any
amount OF trouble. It required no prophetic in
sight 10 see that. Here was the thing: certain
men buy UP nearly the entire capital stock OF
an important railroad system, still in the stage
OF growth and in growing territory; they then
propose TO reimburse themselves for their out
lay. with great profit thereon, by converting
each piece of paper owned into three pieces and
selling the same 20 TIE public. So far all right.
But is the control of this important property
parted with 70 the buyers of the aforesaid pieces
Of paper? Not at all. By an ingenious eontriv-
ance Of voting trust frst. and classification OF
directors afterwards, the same people hold alb
solute control OF the property after they have
sold the ownership.
The effect is that so held in absolute control.
without the restraining influence Of having their
own money involved, the Rock Island could be
used as a club against any other roads. either in
rate making. extensions. invasions of territory.
or anything else; while the men controlling it
would have all their financial resources left
free 90 capture other properties I'm the same
way-Northwest, for example
These facts were plain enough to prominent
railroad men, but very little said about the
matter at the time II Is only lately, since fnan-
cial conditions have thrown frosty chill on
these ambitious schemes, that the antasOnism
they excited has been any way confessed. The
way things are shaping now. it looks as if stock
market exigencies viii finally bring some tmpor-
tant establishments. It is a bare possibility thar
the Moore Brothers will devote their acknowI-
edged talent and restless energy to other than
the railroad business; or Al least receive as as
sociates a number OF gentlemen who have in
terests 10 guard in properties other than the
Rock Island
Meantime. the scheme for putting the North
west Company through such conversion-of-
securities scheme Rock Island has been aban-
dOned by the gentlemen who proposed il. owing
to circumstances over which they had no con-
troll.
There has been much discussion through the
week as to "who has been hit?'' On Friday.
when the fall OF prices was liveliest. people ran
round inquiring OF each other If there any
trouble-meaning had any firm or institution
failed. None had failed. there is no indication
that any going fail; but II is certain there
are a lot OF people In trouble-crowds OF them.
there always when bull market turns
to a bear one. Every commission house man
knows that. But the selling the past week has
been not so much by customers of commission
houses by big men. swinging great lines OF
stock. Reports had IL that the Western and
PittsbuFg men had been Hquidating; also that
Mr. Keene had been forced 70 do the same.
Other reports were that Mr.. Keene was raid
ing the market II he had much part in it, there
was little outward appearance OF it yesterday.
when he seated quietly in his ONCE perusins
with interest some horse ACKNOWLEDGEMENTS
or something To a remark about his interest IN
that sort OF thing at such time. he replied;
did you expect to find me reading the Lannen-
tations Of JeFemiah?''
Whether he was seeking consolation or In
spiration. IN the horse pedigreeS. is not 10 be
said here. Undoubtedly he did get hit some time
severely; but the heavy liquidation of the past
two weeks seems to have come from the West
ern men. Mr.. Gates, II is said. went early. light
ening his lines considerably Others who have
been considered to be of the same party, have
been going since. the heavy selling of 81. Paui