The Savannah morning news., 1903-07-19
THE SITUATION FRAUGHT
WITH UNCERTAINTY.


A Further Decline of "GiIt-Edge"
Securities-Many Capitalists over
Extended-Where the Blame Rests.
the Readjustment of Values.
Crops and Railway Earnings Not
the Only CONFERENCE.-The Mon
ey Stringency.
New York. July 1s.-The Financial
Age. in its leading article to-day says
| that the period of decentralization.
! through which the stock market has
/ just passed, has been accompanied by
| features of more than passing signifi-
| canoe, some of which are without pre-
| cedent even in the checkered history
of Wall street. Perhaps the most note
worthy one is the weakness of the very
choicest railway properties-corpora-
| tions which disburse millions annually
\ in dividends and interest on outstand-
/ ing bond issues and still have a sub
stantial surplus account remaining;
| properties which report monthly in
creased traffic and earnings and which
are controlled by America most prom
/ inent hnanclers- That the securities of
| such properties as these should be
! permitted TO establish new low records,
| 10 decline far below the point where
! their earning power and statistical
strength alone considered, they should
/ attract the most conservative of in
/ Vestors al home and abroad is not
alone attributable to the monetary sit
uation, although that is undeniably the
| Chief underlying cause of the general
| depression OF values.
The ungarnished truth is that the
majority of our leading hnanciers, rail-
road men and erstwhile captains of
| industry" are over-extended. A tri1e
over two years ago they were leading
the greatest and most unwarranted
! Dull movement that this or any 9TH
er country has ever seen. Drunk with
4 enormous profits reaped in the stock
| watering schemes which marked that
1 period, they turned their attention to
the stock market in the hope of again
doubling or trebling their capital, as
| they mad done IN the organization of
the large industrial corporations, many
OF which are even now beginning to
dlslntegrate. They were ably assisted
by the outside public, which at that
time was represented in Wall street by
every walk of life from the ministry
10 the Kitchen. But in spite of the
eagerness to purchase the securities
with which the market was flooded,
many remained undigested and are to-
DAY in the hands of the syndicates
winch undertook to float them
When the panic of May 9. 1901, OPEN
ed the eyes of the public to the inner
ent weakness of the movement they
| were wise enough to acknowledge that
| they lacked the resources necessary to
hold securities, the value of which was
extremely doubtful, and withdrawing
from the market, left the burden where
II properly belonged, on the shoulders
OF the captains of industry" and the
seHerals OF hnance," who to-day are
| paying the penalty for the debauch
which marked the two first years of
the twentisth century.
When one stops to consider the ex
tent OF the liquidation of the past year
ana OF the resultant shrinkage of
values 1t seems strange that the re-
auJustment of prices, of which we
nealu SO much, and which was popu-
| lariy supposed would clarity the finan-
| clal atmosphere, has failed to remedy
matters ana that, instead, there is
1855 resistance than there was 3 and
points up. Low marks established
IN the panic of 1901 have been passed
pennsylvania and New York Central
nave shrunk IN value more than one
ttlru steel common is selling on a ba-
SIS Where 1t pays dividends at the rate
OF 20 per cent. per annum, and SO if
| Is throughout the list. Yet the inter-
ests which dominate these great prop
| erues either cannot or will not purchase
shares which they eagerly sought
at the absurd prices that ruled two
years ago. 1t is true that the country
| IS prosperous, that wheat is still grow
ing, that transatlantic trains con-
| tnue TO run on schedule time and peo-
| pie eat, drink and wear clothes. This
encouraging information has not es-
| capped the notice of optimistic com
mentators at any time during the long
continued shrinkage of values, but is
IL not singular that it has failed to
attract to the security market those
VINO are enjoying the good times and
whose surplus funds could not be BET
ter invested than in the shares of the
corporations which must necessarily
reap the benefits of prosperity.
wall street is not blind to conditions
mat exist west of the Hudson river,
Notwithstanding popular belief to the
contrary, and it appreciates the value
| OF good crops, etc, but it realizes that
there are other considerations of equal
Importance which determine the course
OF values. Chief among these consid-
| eratlonS at the present time is the
trouble in the money market brought
ABOUT by the unwholesome syndicate
operations and the Cutting of the Sc
cur1ty market. When O. railroad like
Union Pacific is unable to borrow SIO.-
| OOO 200 for eighteen months at less than
| b per cent. interest, it is time to look
| elsewhere than at the crops for the rea-
son for the depression and to acknoWl-
| edge that we are confronted with a
situation fraught with uncertainty.