The sun. [volume] (New York [N.Y.]) 1833-1916, 1902-11-24
THE FINANCIAL SITUATION.

in the market for securities. Events proved
that there lad been a rather thorough
liquidation Of the reckless speculation
started In the late summer, and the discov-
cry of the fact. added to the growth Of what
Wall Street calls IAN unwieldy short inter-
est" made for a sharp recovery in prices.
The recovery was materially helped, moro
over by two important circumstances: one.
the runored change in the control .: the
Manhattan Elevated Railway, by which
the system is either to be consolidated
with or leased by the company that
is to operate the new Rapid Transit subway:
the other what seemed TO be relaxa-
ton in the rates for the use OF money for
long periods. The mystery which sur
rounded the Manhattan deal was exactly
what was wanted to excite the dispirited
imagination Of Spectators. It brought
back into Wall Streets jaded heart once
more q touch of the old glorious fever Of
the days when practically every property
represented by shares dealt in on the Stock
Exchange Was, 1t was supposed. being Dit
terly fought for by the managers OF rival
properties at a fabulous advance In market
value Had the arrangement conc erning
Manhattan taken place two years ago.
the Wall Street story about II would have
been either that the Pennsylvania or the
New York Central railroad was arranging
a billion-dollar combination to take in all
the transportation facilities. including cabs.
carriages and express companies. in the
Greater New York. As 1t Is. the tale is
somewhat sober, limited and definite, Only
the elevate and the underground railways
are to he combined. Outsiders and lay
men are just little puzzled to see how the
arrangement is to be of extraordinary mu-
tual benefit for the two roads interested;
while as regards any concern which the
New York Central railroad may have in
the matter. the best opinion seems to be
that the financial and engineering skill OF
that company Is fully occupied with other
matters Just now. Many close observers
of the stock market hold that whatever
project is under discussion. the recent rise
| in the price Of Manhattan stock has been
argely speculative.
The alleged easiness Of time money
consisted in this, that large banking
house which had great deal Of money
| paid into it rs the result Of various financial
| operations and was unwilling, naturally.
| to hold the funds in idleness. put out the
| money at the legal rate Of interest. not
| eNHclHR lut BVu-
orally asked in Wall Street at the time.
! This commission" Of course, IL merely
! device for evading the usury laws. and
! tho banking no .se in question did not wisn
| to use l.. The action served. however
| TO abolish the commission" rate tempo
rarily. and hence the cry OF easy money
was started. The money situa ion as out =
| lined by those who speak with authority
| is this: The question of money rates in
| times like the present Is determined TO a
greater degree than is commonly appre-
| ciated by the credit Of the individual or
firm asking for the loan Making all such
| allowance, the general fact is that call
| money il likely To remain around present
figures until about the middle Of the COM
! ing month. and then, and perhaps before
| them high rates for the Use OF money bot b
on time and on demand will probably be
i'm evidence until the end of the year and
we'll into the next year. Spectators will
be very lucky, indeed. II they can get any
time money for less than per cent. before
February. There are many contingencies
| to be feared which may intensity this state
of affairs, and there are few contingencies
to he hoped for which may ameliorate
them. No relief need be looked for
from the West. In Kansas City, Nil.
waukae, san Francisco and all the great
interior trade centres money Is comm and
ing higher rates for Use than 1t is here. the
cause being the same activity in bushes.
and local speculation in those places AZ il
New York in bankers offices there. a,
in our own city, directors are looking ovel
the huge mass of collateral that they have
on hand aud wishing in many cases tina
they saw a ready market for II. The fnan
cial situation there Is such. in other words
that il will absorb all the money tina, ma.
be turned in by the farmers "a the market
ing Of the crops. which has been undul
delayed foe various reasons, slowly pro
ceeds. On the other hand. every indica
ton points to continuous hardening q
the rate Of private discount in all the Euro
pean cities, and if this produces an ncreas
in bank rates there, good deal Of gold wi
be sent ont OF this country. Manifestly. an
, such speculation a. that which was |
progress in Wall Street az the end OF las
week Ia not only unwarranted, but exceed
ngly dangerous. The fact has yet to
beaten into certain peoples heads. II seem,
that the legitimate and speculative bushes
Of this country has outgrown the country
capital and that the financial market
suffering from indigestion from the uuantit
of new securi, issues that it has been force
TO swallow
!. The really important development
last week was the 10 per cen
advance in wages accorded to railwa
employees. The causes that led 10 thu
action and the results that will probabl
: flow from it are profoundly interesting I
the student OF economics and finance.
many instances the railroads were force
. to grant the increase because they WEI
y. well aware that peremptory demand
for il were about to be mad
7. by their employees, and that
tho present congesed state Of railwa
business strikes were To be avoided AZ a
hazards. The determination of the on
;. ployees TO make these demands date
from tho time of the Interference Of Pres
dent Roosevelt in the coal strike, IL bein
perfectly clear now that the members
trade unions throughout the country col
slider hat the President Of the United Stat,
has put himself at their head with Il
flag in his hand. The compensation
the railroads from these increases in wag
l.. 4. l., e.. L.. At. ,t,.