The sun. [volume] (New York [N.Y.]) 1833-1916, 1903-06-08
TIE FINANCIAL SITUATION.

were six commission houses IN wan otTeeC
borrowing between $200O0,0 900 and $40 ooo-
600 apiece on speculative collateral ana
conducting such vast and reckless opera
lions for the rise in stocks that the banking
community at last became alarmed ana
notified these firms that they must curtal
their business. According to all accounts
the golden profits Of that great boom
turned into leaves, like the treasure in
! the fairy tale, when the attempt to grasp
them was made; the much Wanted Judg-
ment Of the so-caled leaders OF specu-
lation was found to be mere childish
folly. To-day the greater number OF
these same commission houses are, with
the same passionate fury with which
they urged their customers to buy stocks
at an average price Of $50 share higher
than that which now prevails. spreading
the advice broadcast to sell stocks short;
and as before there was no stretch OF the
inventive faculty too great in the process
Of inducing ignorant and gullible people
to buy stocks, 80 now there is no fiction
too monstrous or rumor too absurd to be
used in persuading investors to sell their
holdings at a sacrifice. We are really
witnessing exactly the same kind OF
operations as those Of last summer, the
point Of their application only differing.
Just Is last summer Wall Street was
flooded each day with tips before the
opening Of the market that this or that
stock was to be put up" during the day,
40 now the same news is daily dissemi-
mated In advance that certain stocks are to
be put down." and from the fact that an
attempt Is invariably Immediately made
to move the stocks named in the direction
Indicated. the source Of the information
and the object Of imparting it are apparent.
The extent of these operations is, OF
course, not as great as that Of the preceding
movement, for the reason that people do
not sell stocks short as readily as they
buy them and that whereas there is prac-
tically no limit to which the imagination
| may soar in calculating the value OF cor
| poration shares. there is very obvious
limit to the figures to which the prices OF
these shares may be depressed Never
theless, it is an old-fashioned bear cam
paign that has been in progress in Wall
Street in the last few weeks. and 1t has
been carried to as great an excess az has
ever been done in Wall Streets history.
1t is not meant to be affirmed by this
that there has not been any real liquidation
OF speculative or investment securities.
On the contrary, there has been great
deal OF such liquidation, and selling OF
that nature brought to-day's speculators
for the fall into being. What started the
decline in prices was not business con-
traction, crop disasters. labor troubles or
any specific causes, but a general belief,
first on the part of disinterested observers,
secondly by the banking interests, and
third by the whole community, that the
imitation OF values in the stock market
had been carried altogether too far and
that the pyramid of stock speculation
was obviously topheavy. Proof Of the
extent to which this belief had been dis
seminated was afforded when one or two
of the great syndicates had to confess
failure The once ready and abundant
market for new stock issues had departed.
Liquidation had already proceeded great
way when this fact was observed; and
now that it has accomplished its work,
or nearly accomplished it, in the safest least
disturbing and altogether most satisfactory
| way in which such task was ever per-
formed in any security market, the bear
operators, consisting almost wholly Of those
| who have lost money in the fall in prices,
appear, as usual, to overdo the business.
| These operators are going, as they always
20, to extremes, They have all the crops
ruined one day. all the spectators in Boston
failed the next, all the shops and factories
| in the country about to be closed by strikes
Of laboring men, and all the business Of the
| land in dire suspense because there is going
to be Presidential election year from
| next November. They even sell stocks,
as they did last Thursday, because Of the
general gloom" produced by the presence
Of smoke in the atmosphere. There have
been some genuinely unfavorable in
huences affecting the market in the last
two weeks. but their bad character has
been largely exaggerated. The most i'm
portant Of them we're those relating to the
growing crops, and there is no doubt that
the Government crop report. due next
Wednesday, will show a falling of in crop
conditions. But the outlook still is for
much the largest winter wheat crop ever
harvea& ed in our country. The wet weather
has been ideal for spring wheat and has so
moistened the ground that the -hot winds y
DOGGY, If it appears later, will be Invested
of terror Corn has been injured in the
Mississippi River bottom lands, and the
complaining season is late. But. accord
ing TO the reports Of all trustworthy observ-
ers, a few days warm weather in the corn
belt would make it seem very doubtful il
all that had happened there by way of wet
weather in the last month had not helped
corn more than it had hurt it As has
been happily pointed out in one Of
the weekly trade reviews, it is an axiom
in the grain trade that moisture never
produces famine. in my thirty-fve
years Of life in the grain business said
Mr. Norman B. Ream one day last week,
whenever l heard of the bridges being
washed away by floods. always sold my
corn" The drought in this State and in
New England. and to some extent in Penn
syvania, is a serious matter II it keeps
on, the supply of fodder in this region will
be 30 small that cows can be fed with diff
Guilty, and the cost OF milk butter. cheese
and similar products, as we'll as of those
OF vegetable gardens will range high.
In the stock market consideration of the
matter there is this compensation, that the
Eastern drought will raise the prices OF
Western farm products, and so help rather
than hurt the Western railroad stocks
But that is poor consolation to the dis
tressed New York farmers, who only last