New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1902-05-04
financial.
The Financial World.

which was unknown outside the circle OF those
Immediately engaged. When the various stocks
constituting the airy fabric went down in a
common ruin. the smash caused considerable ex-
element. and for a time severely unsettled the
general market. This IN nutshell is the his
tory of the week.
One reason why the extent Of this special
speculation little known. was because
the money to support it not borrowed in
New York 1t came from all over New England.
the amount obtained from city institutions be-
ing comparatively small Such collateral could
not be put into financial institutions here to any
extent AS far as known. the personal notes of
some one more Of the leading spectators.
secured by stocks which no reputable bank
trust company here would admit into its loans.
were used to borrow money on from every pro-
vincial bank and money lender all over New
England. The name made the thing go. II had
the prestige of the Vanderbilt family. The bor-
rowings being so scattered, there was knowl-
edge of the aggregate total; which. if known.
would have caused trouble long ago The
cess of the scheme seems TO have caused the
ring of spectators to extend themselves so far
and wide. that the smash came at last by the
calling of the small amount of loans they had in
this city.
1t puzzle TO the Street how a lot OF
stocks which the average commission house re-
fused to touch, could be doomed as they were:
ana the solution was sought IN SuppOStttOnS
that trust companies were lending the money.
Perhaps this fact which is indisputabIe may
give the officers Of the old trust companies food
for rejection. There is a growing public de-
mand that trust companies shall submit them
selves TO the same regulations as to reserve and
to publicity. that the banks under. The
trust companies object. II they persist In this
the result is plain. a trust company will come
to be regarded a suspicious institution. The
officers of the old companies fail to recognize
that a swarm of new trust companies are COM
ing into existence, which avail themselves Of i'm,
munities such institutions enjoy TO go heavily
into speculation, while covered by the sound
reputation which the old concerns have. by pru-
dence and sagaCity, given to the name of trust
company. So far has this gone. that when any
recognized unsound speculation arrests atten-
ton. the Street at once begins to talk about
trust companies. 1t has been talking the
past week. and even specially mentioning one
company comparatively new one. which had
to make specific deniaIs because OF the sus-
picions excited. The issue before these com
panies. therefore. is clear-either they will have
to submit their business TO the same restrictions
as the banks. or they will lose IT through public
dlstrust.
Assuming that the losses by the collapse OF the
Webb-Meyer syndicate stocks are to fall over a
widespread area, whether in New England or
elsewhere. II follows that they must spread
thin: and TO this extent, there is safety. 1t is
useless TO talk about the stocks recovering;
meaning by that. going back TO former prices.
Some it is difficult to figure out any value for.
Even the best OF them have been doomed to fig
ures which only years OF prosperous growth OF
the properties would justify. Therefore there
must be losses; but these being spread wide and
thin. the hurts, while painful. Will not be seri-
Gus. Indeed. the whole amounts involved
insignificant, when balanced against the gen
eraI market. In respect to International Power
stock the first to collapse. this presents familiar
features. \ pool rushed UP the market quota
lions for the stock like a rocket. and then one
OF the members sold out on the others Out
siders had very little share in the operations.
II there is any trouble here It will be among the
pool members who took the stock which the
other fellow unIoaded on them
The shaking which the smash gave the Street
caused general decline in the market on Fri
day and the calling of loans sent money up to
10 per cent. Yesterday there was a continuance
OF liquidation. but also such excellent buying o.
good stocks that the market greatly stealiied.
II must be remembered that most Of the stocks
in which the smash took place are not dealt IN
on the Stock Exchange at all. but are on the
curb market. The heaviest selling yesterday
was recognized TO be the liquidation of the ac-
count OF we'll known trader, much given tc
Il
he could handle and was credited with havfnG
done the same thing in Brooklyn Traction These
and doubtless a line OF other stocks he had. had
reduced his margins 10 a shOestring. and when
the general market broke he had 10 so.
The principal railroad stocks found plenty OF
buyers. Specially good buying was noted in II
Iinois Central and Pennsylvania. The former
stock closed yesterday only couple OF points
below the highest quotation lately made for IT.
D.
good reason for saying that in the final round
up it will be found that the Boards OF Directors
of the Southern, the Louisville and Nashville.
and the Illinois Central companies. will have a
striking similarity TO each other. They Will not
be identical. but they will be near enough alike
for all practical purposes. And parenthet icalIy,
II may be said that Illinois Central is one OF the
best stocks on the list. and one which investors
tie TO in safety. AS to Louisville. IL may
be surmised that the short interest in the stock
has been having bad quarter OF an hour lately,
as was recently intimated was likely TO come
Much of this short interest is in London on calls
1t is rumOred that the next dividend on the
stock will be at the rate of 6 per cent. Under
the right mana cement. Louisville should earn
that easily.
Pennsylvania has made its dividend per
cent regular. It has for a year or more been
paying per cent and I per cent extra The
rate being raised to 6 per cent regular extras
will on the top OF that. The buying OF
Pennsylvania observable for week or ten days
past is Of investment character and will
make itself felt later when the general market
gets into more settled condition
Some natural apprehension is felt as TO how
the market Will act the coming week while GER