The St. Louis Republic. [volume] (St. Louis, Mo.) 1888-1919, 1903-07-13
STOCK MARKET NOT
YET READJySTED.
Long Period of Liquidation Has
Not Restored Prices to Prop
er Equilibrium.
FURTHER REACTIONS FoRESEEN
Law of Supply and Demand Is
Working inevitably Toward
It's Own Nindication-
Bad News Discounted.
REPUBLIC SPECIAL.

REPt Rl.I' SPEC 1Al'
New York July l2.-The stool. market. IN
the closing days of the week. resumed the
process of readiustment which was tenn
porary halted about one month ago when
the little investment buying appeared aud
concerted efforts were made to check de
clines.
If the intervening interval demonstrated
anything at all. 1t certainly made clear the
fact. through the lack of buying power
that so far as some securities were con-
cerncd the work had not been thoroughly
performed.
1t disclosed also-wliat ought not to sur
prise experienced baullers-that no mere ar
tifirial barrier, such as supporting orders
and fictitious money rates. can long OPP
pose the working If the great economic
law Of supply and demand
The market is working for the restoration
OF equilibrium between selling price and in
trinsic value, seeking TO establish the worth
of properties based on the actual. not the
nominal capitalizatons 1t is doubtless
disappointing TO the many after ten
months of liquidation and a record of sx-
tensivc declines, to find that the process of
adjustment lower basis is not yet
complete; but. from recent events and in
dications, which foreshaduw an extension
w iiIuusliIdl ltdtlIOl iilS future. II is
impossible TO arrive at any other conclu-
sion.
1t is not to be inferred that the long
period Of liquidation has been barren OF
result on the contrary. In the forty and
fifty point declines much bad news has
already been discounted and much that is
beneficial has been accomplished.
Some securities. however. had level
which doubtless approXmates value. and
some. possibly. In view of specially favor
lalr price, These. however ~.
and not the rule If they should he forced
stu lower. by the sympathetic influence of
selling of men involved with undesirable
and unstable shares, who are forced to
lettiSon cargo to save their ship, all that
can be said is that they, too. in time Will
ind their proper place and due appreciation
from discriminating buyers.
WALL STREET PERPLEXED
Wall street cannot yet appreciate that it
Is dealing with an economic question. and
its stocks and bonds decline. when ali the
usual indicia of trade and industry are fair
ly favorable.
There is still uncertainty regarding the
harvest outcome. particularly as to corn.
but crop conditions have certainly improved
railroad earnings continue excellent, and
bank clearances make favorable showinGS
There is no Justification fer Wall street TO
| go hunting in Syways and odd corners for
an explanation OF its market reaction. for
| the trouble is within itself not without
1t does not rest with the crops or with
| business, but with the overproduction Of
| securities and the overcapitalzation OF
| the delicate fabric of credit was disturbed
by the ceaseleSs operations of the printing
and capital Establishments.
| One hundred dollars worth of stock was
| turned into Sl5o or 500 worth of bonds and
stock certificate representing 10 cents in
| value came out as 100 cents.
| What New York was doing in this respect
every city OF size in the country was imi-
tating, until floating capital has been locked
| up into fixed form from the Atlantic to the
Pacific and from Lake Superior to the Gulf
| AMI with it all came the extravagant i'm.
ports the wild speculation. the enormous
borrowing from abroad and q variety of
concomitant evils: including the exorbiten,
demands for capital by railroad and indus
| trial corporations. together with spend
| thrift administration.
An experienced banker is quoted as saw
ing; during the week. that everything is
! right except the money market which is
not unjustl!y likened to a physician pro
| ticular with the exception of weakness Of
| the heart. But the trouble is not altogether
| that. for the money market works auto
unless there is something at fault which
disturbs confidence and contracts credit.
mat something may not be found in the
already tremendous loan expansion of the
country or in the sorry exhibition which
| the industrial corporations are making,
! Prosperity has continued on unparalleled
panies which represented The capitaliza-
ton of American industry have in hut few
IL stances fulfilled the promise of the pro-
motors. much less the prospcctuses of the
bankers. All of which suggests with the
selling of good stocks to protect unsable is
| sues, that certain CAPTAINS of industry
| may surrender commissions to take service
in the ranks or proceed with the avoca.
ton of chevalier d'industrie. which is thei,
| proper field of labor.
| The hope of the future rests with the
| crops, but not for the purpose OF creating
| speculative movement for an advance ir
stocks for this season. at least. Yhe mar.
ket in its readiustment to prevailing con
| ditions, such as business contraction anG
| higher interest rates. has other problems
to deal with than speculative activity.