New-York tribune., 1903-07-26
Financial.
The Financial World.

/ that the market had closed up with a better a,
pearance than it had had in several weeks 7.
did certainly have a surface appearance tn.
way. but it was deceptive. First thing Monde
morning the account was sold out by a pror,t
nent house OF a customer who was vazusIv
spoken of as "a politician and speculator" Tbi.
started the ball rolling again. and il contipus5
to roll until announcement came Friday after
noon Of the two failures which have hIlad a
much newspaper space since
OF course Immediately after the failures fb.
market rallied. II always does when a blow a.
pected and watched for has been struck Tba
rally did not go far The closing prices yestar-
day were not much improvement on the Iows-t
of Friday; but for such Improvements as there
was. we give thanks
/ The market would have done better were !,
not for the feeling almost Of certainty that one
possibly two more failures Will have TO be an
nounced the coming week In such parlou,
times everybody gets talked OF more or less
and if one believed all the frightened whisper
ing which goes on in corners, there would ba
nothing to expect in the next ten days short %
half the Street going broke. This sort OF thing
cannot be helped when the majority of men
are only taking counsel OF their fears. II Is to
erably we'll known, however. that one or two
concerns must be taken care Of or 60 u the
wall The very sincere hope is that they can
and will be. If they have 10 go. the fact that
the action was expected and prepared for does
much to minimize the effect. But the troublA
may be avoided
Every time there has been a wreckaze az
the end of a boom period in Wall Street fall
ures have come from the houses which went
down having loaded UP with too heavy a bur
den of some one particular kind OF stock. The
stock when so accumulated, and known to be
so. largely loses a free market. This does not
matter much until the time OF money striugsncy
comes: then the banks call the loans and
liquidation is next to impossible. except at ruin
Gus loss Sometimes it turns out that the
stocks simply cannot be marketed at all; and
this has more than once saved the unfortunate
debtor, since his creditors have found il more
expedient to carry him till better times rather
than throw the collateral on the market at
waste paper prices. AS matter Of experience
ii is rarely that house has gone under which
had only a general line Of stocks. readily mar
ketabIe 1t is the big load Of one particular
stock which does the breaking.
This applies to the occurrences of the past
week: and If it should unfortunately happen
that more failures are to come. il Will probably
turn out that in these cases also, there was one
stock which did the trick.
No one who has securities az this time is
going to sell unless he is absolutely obliged to
I
breaks occur in the list, il is likely 10 he in
spots. by the selling out OF loans, and it viii
be in stocks which have a more or less re-
stricted market This naturally Will have an
adverse effect on the whole list; but forced
liquidation in quantity in the leading stocks.
those always marketable in large amounts.
seems to be nearing exhaustion-seems. how
ever That is the best that can be said.
As TO prices. they don't count now 1t is the
margin on the loans. 1t is Of little use TO point
to earnings and dividends on a property in proof
of its cheapness at current quotations, when
some bank. trust company or banking house IS
selling out an account. This is the time. how
ever when the bargain hunter appears on the
scene. Truth TO say. there have been very few
put in an appearance yet This fact has been
generally commented upon in the Street.
One interesting, circumstance about the Steel
stocks which have been centres Of attention all
the week. is the crowd Of people at the transfer
offices of the company getting stock put into
their names. The clerks are working overtime.
and yet are behind il their work This means
that people who have had these stocks in
brokers' offices have taken them up rather than
sell them at loss; that is, have paid for them
outright, and are putting them away in their
boxes.
The continuous outpour Of these stocks on the
market is largely explained by the failure Of
Talbot Tailor & Co. 1t was generally under
stood that this house had them in large amounts.
Driven to forced sale. and with bear traders
safe in attacking them, the falling quotations
made havoc with margins everywhere. and 50
augmented the stream Of liquidation These
stocks are held all oyer the country. 10 ex-
tent beyond any other stocks on the list Those
familiar with the matter. say that in every
country town in the West which boasts a bank
or two, people have borrowed Of their bank 10
buy the Steels.
The fall in price has been killing TO all carry
ing them on borrowed money; hence the seIHns
has come from all quarters. until now the COM
mon stock is selling below the price Of old non
dividend paying stocks with which Wall Street
has been familiar for a generation; and the pre-
ferred could sell where il is if 1t only pay
| ing per cent 1t has actually been suggested
seriously, that because of these prices Mr. Nor
gan ought to pass the dividend on the common
stock. If he did such a thing that while the
| company was actually earning il, he would de-
serve to be held up to public execration- Thou
sands of people have bought this stock as an in
vestment. But he won't do it,
| In the trying out process of the market. quite
a list of stocks long held up at level far be-
/ yond where they should have been. have
/ dropped nearer to where they belong. There
/ was, for example. no reason in the world why
J Brooklyn Traction should for long a period
/ been held around 60 Some time or other 1t was
/ bound to break Even now. Brooklyn at II ana
/ L. S. Steel at 80 look a little incongruous- Inc
| much vaunted Realty stock. originally broush-
\ out with as glowing anticipations as was Arla-
/ gamated Copper-and from about the sans
source-this stock has been pretty thoroughly
I -TF