New-York tribune., 1903-07-20
THE WEEK IN WALL STREET.

selling near the panic figures or May D. I5Ul,
and some issues actually going under the level
recorded on that date. The decline was not
accompanied by adverse developments in the
position Of affairs affecting the intrinsic worth
Of securities nor was it followed by failures or
indications Of disturbance in Wall Street
houses. The fact that the long period Of de-
clining values and liquidation has not been at
tended by individual or firm failures is a mat
ter for great encouragement, as it shows that,
whatever speculative excesses may have been
INDUCED in. the commission houses and large
operators in stocks are financially sound. Many
large spectators have been heavy losers in the
last nine months; small holders have also suf-
tered. but their losses have not extended in in
huence beyond the individuals concerned. Wall
Streets decline in prices has not affected the
country's industries. Some people believe that
the decline foreshadows breakdown in general
business. but there are no indications that
important change in the industrial situation is
developing.
Speculative sentiment showed Improvement
at the end OF the week, and brokers reported
better class Of buying than had been recorded
In many days. Results this week will doubt
less show whether OF not the upturn in prices
Is to run beyond a speculative rally, and the
character Of dealings and the of values
will therefore be watched with particular inter
est There some traders who believe that
no genuine bull movement be inaugurated
at present this idea being based on the theory
that the public will not enter the market for
long time after such a period of declining
values as has recently been recorded, that the
banking interests will discourage activity.
owing TO the approach of the day when
the crops VIII have to be financed by Eastern
capital. and that the powerful bear party that
has been hammering values for many months
IS not yet satisfied that prices cannot be made
TO go lower. It is quite likely that any fur
ther advance this week new lines of shorts will
be put out to test the market, if for other
purpose. Against the predictions of traders who
believe that prices viii go lower it may be well
to place certain factors on which advocates Of
higher prices base their claims. They point to
the fact that stocks are selling under their
actual worth. that weak holdings have been
Hquidated, that investors and large institutions
have been putting securities away in strong
boxes, that the leading men in the country are
going record bulls. that the crops
making favorable progress and that the coun-
try's financial situation is sound. Arguments.
no matter how sound, often fail to influence q
stock market. and despite the generally ad-
mitted strength of the situation bull factors
may not have their inning at present.
The significance of the borrowing by various
railroad companies on short time notes at rela-
the companies realize that this is not a good
time TO ask the public to buy bonds; also in
the fact that a higher money market is expected
10 prevail throughout the year. If money rates
are to be established on a higher basis. then the
fall in stock market values may he explained in
part the theory that prices are being read
justed TO the higher cost of money. Time money
has been growing frmer, and as a consequence
the outward movement Of gold has been checked.
ject to such sudden changes that it is not safe
to predict that the outward movement of gold is
over for the season. but in we'll informed circles
Il is thought that the chances do not favor fur
ther heavy shipments. Regarding gold exports,
IL is interesting to Lote that in the last fiscal
year the excess of gold shipments over receipts
amounted to only few hundred thousand dol
lars Money has been flowing to New-York in
larger volume from the interior, but the move
ment will not continue for many weeks, and
when the interior begins to draw on this centre
\ for funds money rates will doubtless advance
" The banks have prepared for the fall demand.
and the liquidation in stocks eliminates a source
OF danger in the monetary situation but the idea
that the Western demands be met without
disturbance in money rates is not enter
tanned in conservative quarters. Congress Will
meet in November and endeavor to pass some
currency reform measure, but legislation Of this
character Will not increase local bank holdings
this fall. although it will have good effect on
sentiment.
In the last year there has been a shrinkage in
stock market values aggregating on par values
S1,500O00,000. of which upward of S2OO,OO0,OOO
is accounted for by the depreciation in the
United States Steel Corporation issues. United
States Steel common IS selling at a price that
appears rtdiculously cheap as based on the in
vestment return of the security but the fact that
the stock pays per cent and yields about -
per cent evidently enters little into the consd-
Grafton OF people who have been selling the
issue, and people who refuse 10 buys the steel
shares at any price. The low figures for the
steel stocks reflect in part the belief in many
quarters that, despite the current large earnings
OF the United States Steel Corporation, 4 per
cent dividend calling for S200000O0 a year can
not be paid indefinitely on the common stock.
II may readily be conceived how few years Of
depression in the iron and steel business would
teopardize dividends calling for so much money.
As far as its quotation is concerned, United
States Steel common is selling on a non-dividend
paying basis. and on the theory that iron and
steel Will remain prosperous for another year
some operators are buying the stock to hold for
a rally. which they believe Will develop before
a setback in business occurs. Conditions in the
iron and steel trade are sound. and increased ac-
tfvitv is looked for in the fall IF depression
should. however. set in it would seem as if the
stock market had more than discounted ii. It
is we'll to bear in mind that the volume Of gen
eral business in this country is now larger than
in any preceding summer period. and that rail-
road earnings for the first week in July show a
gain Of is per cent the same time year
ago For the six months ended June 80 earn
ings were Is per cent heavier than in the best