The sun., 1903-04-27
TIE EINANorAL INTUITION.

q
f3rst time that such q phenomenon has 90
ourred for several years. Instead OF .
market sustained or depressed BY ARTIFICIAL
means, that 10, by main force. 'deas' and
r,imors OF deals, and by the work In general
Of oliques and very large speculators. often
In direct opposition to natural oonditaons'
II has been q market where the law OF sup
DIV and demand has held sway; where action
and reaction have taken place as they
ahould: and where the actual merits OF the
different properties concerned. the enlarge
ment or dininution OF earnings. the guam
titv of securities for sale In the market ana
the quantity Of money available to buy them
have governed the fluctuations OF prices.
The artificial market came to an end with
the COLLAPSE OF the great speculation FOR
the rise last summer. Four or hve great
operators, each having peculiar interests
in different groups of securities. but, never
theless, all working separately, men orui-
narilv of extreme shrewdness. but VINO
for the time being lost their heads over
what they conceived to be their own power
and the immense prosperity OF the country
set out to push prices up to the highest
recorded limit In the face Of money mar
ket whose frown grew blaoker each day
the movement proceeded There was put
one end to the affair. OF course. Naturai
law, long patient and forbearing over the
contemptuous way in which 1t had been
treated, at length asserted itself. BE-
fore the month Of September, 1902. had
expired it was evident that Wall street
would be lucky IL 1t escaped financial
crash before the end Of the year
Prices gradually fell until in the early part
Of December the great banking interests
felt that they had firm ground under their
feet and announced. by the formation OF
the famous money pool. that the trouble
was over. The market bounded upward
In normal reaction from the large decline
that had taken place. After period OF
this up-swing rates for the use OF money
again hardened. and fall tn values began.
which again eliminated In . demoralized
market little time ago. Now another re-
action is in progress, based upon the solid
ground Of low money rates. progressed
very briskly last week and was succeeded
at the weeks end by the inevitable profit
taking. This profit taking. however. ought
not to last long or result In any serious de-
cline Even upon the as yet improved
theory that the main tendency Of the market
Is downward, prices should rally much
moro than they have done from the great
fall in values that has taken place. AL these
affairs are matters OF judgment. OF course,
and II there could be any certainty about
them, profitable speculation In stocks. In
stead OF being dinlcult process. would b
very easy. Sufi1ce 1t to point out now that
the doctrine Of chances clearly calls for
further advance In the prices Of the securi-
ties actively dealt in on the Stock Exchange,
and, in all reasonable probability, buyers OF
stocks now can dispose Of them at pront
later on, or. what Is saying the same thing,
the investor thinking Of selling his stocks
will find that II will be considerably TO his
advantage to postpone the operation.
This Judgment IL enforced by considers.
ton Of the factors usually held to be most
weiQhty In determining values In natural
market. In the first place money. owing
to the return Of funds from the interior
of the country usual at this time Of year,
In very much easier and probably will be
easier still In the near future. It Ia now
possible for firms In good credit to borrow
money on approved collateral for nine
months at the rate Of per cent. per annun.
that Is for q time covering all the crop.
strineencies: while money for lesser periods
can be had In abundance between and ~
psr cent. A. has been often explained,
there win be large paying Oh Of railroad
and other loans on or before July I, and
Treasury funds viii be released In oom-
paratively great quantity about tho same
time. Money 10 not only working easier
here, but all over the world. A reduction
In the Bank Of England's rate Of discount
may come at any week, and annual taxa
tion In Great Britain has just been reduced
$50 900 900 by the reduction Of four penoe
in the income tax and BY the abolition Of
the duty on grain. thus making just %
much moro money available for use In The
financial markets. The surest test Of all
these conditions 10 the strength Of the bond
market here Those who have for months
past found IL moro advantageous to keep
their money In cash and loan II out at the
hiRh rates Of interest prevailing are now
making up their minds that the purchase
of good bonds yielding from ~ to ~ per
cent. at their present prices will b . moro
profitable way Of employing their funds.
This 10 the hrst time in eight months that
the bond market has been strong, and
the occurrence 10 ono that almost Invariably
preoedes an advancing stock market.
Regarding the relation Of our banks to the
Treasury, the refunding Of the higher.
priced Government bonds into per cents.
has already resulted In the turning In Of
half Of the 500 900 900 Of bonds called for
BY the Secretary Of the Treasury. Wall
Street has not been a. quick a. usual In
understanding the certainty In al this Of
an increase Of the oountry's circulating
medium. Regulations for over Sii. 900 900
Of new circulating notes have already bean
made by the banks because Of the refund
ing arrangement. and most Of the applica-
tions for the withdrawal Of circulation have
been canoelled. A feature Of the money
situation equally - important - the ques
ton Of the money supply 10 the quantity Of
securities Offering for sale: and the broad
fact II here, that the banks and all Others
having the say In such matters have sat
down hard upon the creation Of new secur-
ties except for the most legitimate and
necessary purposes. No new 'mergers.'
promotions or syndicate undsrwritings win
be permitted and In the judgmsnt Of the
largest and wisest interests in the financial
community the stock market, II II y not
asked to assume further burdens. can take
care OF all that It b already carrying. Finally.
the strain upon the money ma$ket caused
bv the excited speculation last year n no