New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1902-12-14
financial.
The Financial World.

the liquidation which has taken place is s1lfH-
cient to avert serious trouble; and what more
has to be done, will be done quietly The low
est prices of the week were made Friday morn
ing. and then the usual vigorous rally
which brought rapid recovery of three to four
points Here it's force exhausted ard be-
cause of this. the market did not respond yes
terday to bank statement which was better
than had been expected The idea that there
disappointment at the showing it made ia
erroneous. A bad one had been looked for and
this fairly good; hence the failure of
the market to rally on Ii. but. on the contrary
doing the opposite, and selling off was dis
tinct disappointment.
Wall Street is experiencing the reverse proc
ess to that which seen in the height of the
boom. Then the whole country was buying:
stocks; no country town was too small to support
at least bucket shop. Now the country is SELL
ing. Boston has been badly hurt by losses in
coppers; Philadelphia has been skinned by As
phalt and Lake Superior (the latter stock fell
10 points in three days.; Detroit and all North
ern Ohio got laid out by trolley companies; and
so the list might be extended all the coun-
try There has everywhere been some collapse
which has seriously hurt the locality; and as
at time the public appetite for securities
seemed Unsuitable the process OF re-
lection is going The turn called when
the situation became where it 4 per
cent stocks and 6 per cent money.
Relief will come when the return flow OF
money to the reserve centres takes place When
it does come, it will back in a flood. It
always has after a severe liquidation The
bank reserves will fill up to OVERLOOKING. and
fill up fast Money will TO flow in from
everywhere
But before this happens something else has to
happen. The country as a whole will have to
fool he Of tiry%
felt most severely at points where speculation
in whatever form it may have manifested itself
has been the most active. Up to this time, the
money pinch has not been felt with any severity
outside the financial centre-New York. 1t
always starts there. In a short while shall
be hearing of rising rates through the West and
Southwest. Dispatches from various points al
ready tell of this
From city to town. from town to village, the
Tightening process will spread-is now spread
ing-and the effects will be the same have
already appeared in the main centre. namely, q
decline in prices, check to extensions, con-
tracing instead of a spreading out the paying
off of old loans instead of the making of new.
When this has gone far enough money becomes
cheap because of the Iessened call for it; then
it pours back to the reserve centres from all
directions.
This is what we shall see. We have seen It
every time before. and we snail see IL again now,
because the conditions similar.
Has then, the prosperity of the country come
to an end? Not at all. Very far from it. But
extravaganza speculation has come TO end.
The firms working capital has been tied up in
expanding business and projects; and tbs
projects will have to wait until the finances
of the concern can be got into healthier shape-
That is what six months money at per cent
in Wall Street means. =
Mr.. Hill is openly quoted bearish on the
situation. What he is now saying publicly hs
has been saying privately for weeks past-lona
before there was any thought OF trouble with
that International nuisance Venezuela He Is.
in his Chicago interview, made to lay n1aiu
stress this episode; but this was probably
the twist the reporter gave. He had been talk
ing before about mountains OF wind" and
borrowings of more money than there was IN
the world. Mr.. Hill is understood TO have MAIDS
his affairs snug during the summer months; So
he is able to express his mind freely-with
no great comfort to the fellow who has not
made himself snug.
The Venezuela business did affect the market
the past week but it was only the last straw
the camel's back If many borrowers.
from the little man who owed hundreds to the
big fellow who owed millions had not been ner-
the srnness of their margins. the
affair would have made newspaper talk only.
liquidation which had to come anyhow.
No incident of the liquidation fixed attention
the enormous selling of the steel stocks. and
their fall TO the lowest prices yet recorded.
The whole country seems interested in these
securities. Everywhere the steeIs'' are known.
The preferred fell to 70. the common to 80; ard
this while the first is paying per cent. the COM
mon 4. and the responsible officers of the COM
pany assert that there is business ahead for
two years. at the present rate of earnings.
People asking if this be possible with the
stocks selling where they are; and quite natur-
ally. rumors have spread that the dividend on
the common will be passed How" it is asked.
could stock paying per cent sell down to 30.
unless it intended to pass the dividend?"
Whether IL is intended TO pass the diVidend or
not. have information: but this can be
affirmed-that 1T is possible for the stock to
sell down TO 80. while all that the officers Of the
company say of it's earnings be true. AMI that
the dividends be earned and paid right along
This is possible. for like things have occurred
before with exceptional stocks and the steels
are exceptional
Let their enormous bulk be conSidered-'yOu
have TO buy them by the ton to move them
the comment of one who had tackled the
job-the fact that this mountainous mass repre-
sents new corporation. a corporation so gigan-
tic that it has been doubted whether anything
on such scale could be successfully conducted:
that the stocks have spread all over the country
speculatively; and consider the further fact that
the corporation is fighting in the courts an
opposition to it's plan to raise more money
and you have elements of depression against
which reports of earnings and actual payment OF
dividends contend in vain
Is the liquidation over, is the question which