The sun. [volume] (New York [N.Y.]) 1833-1916, 1903-10-25
FINANCIAL AND COMMERCIAL.
SATURDAY, Oct "a.

affairs to such matters as the Swings OF
the market, and to great extent lay their
course either as investors or spectators
upon calculations regarding the forces OF
action and reaction in the market, quite Inc
dependently Of such influences AZ earnings,
statements and other considerations bear
ne upon intrinsic value, the situation OF
the market at present is quite interesting
We have had decline in prices e0ending
for more than a year and carrying quota
tons down further than was known before
In Wall Street In such space of time,
This movement eliminated in sharp
break, as it normally should. amid scenes
OF intense market generalization ms
was what happened in the early part OF
August. Following this there was, strictly
In accord with precedent. an equally sharp
and quick recovery, some of the standard
railway shares rallying in price in few
days over SO share. This in turn was
succeeded by the expected phenomenon OF
a slowly sagging market, bringing prices
slightly lower even thar they sank before
According to the theories under discussion
the market il now in shape for new
primary movement, and this movement
may, of course, be upward or downward.
The natural presumption is. however-and
IN the majority of instances OF similar
nature in the pes. it has been Justified
that the new movement when it starts will
be in reverse Of the one which preceded
II Those who hold to this view regard
the present action of the market as one
which is entirely natural under the cir
curnst ances. They look now for a more
or less prolonged period Of market dulness,
not to say of market stagnation. In all
this time there will be few developments
that will interest the outside public. and
little encouragement extended to any one
to buy stocks. II will be, nevertheless.
period of market hardening and Of careful
preparation for an advance in prices in
due season. The strength Of the bond
market in the last three weeks can only
be- considered as backing up this opinion.
although, of course, conclusive evidence
is not afforded thereby that the low prices
In the stock market have been seen. Never
theless, it would be very surprising il there
we're boom in the bond market and panio
in the stock market al the same time. TIE
buying of bonds. which started only a little
time ago, has proceeded with such rapidity
that advances in bond prices of really
sensational nature have been made. and
it may fairly be said that a boom in the
bond market is actually under way. One
very happy and inevitable result Of these
bond purchases is that they will bring
money into, Wall Street. Money is taken
by this process from savings banks and
other deposit cries where it was compare
t!-'e'~ unavailable for Wall Streets pur-
poses, and placed In the Golfers of bond
houses, whore it is much more readily
BILE for the general needs Of the financial
community,
There are still those in Wall Street who
maintain that they will not feel certain
that the bottom figures of the depression
- ~"hles have been touched until the mar
ket has been subjected to an old fashioned
panic They aver-what is, as a matter
of fact, untrue-that prolonged declines
in the market always have ended in this
way in the past and that they should end
in this way in the future. Precedent is
valuable guide, certainly, but one should
be careful in following its maxims not to
pin his faith to one or two maxims to the
exclusion Of all others. If experience has
taught anything concerning economic mat
ters it is that tho tendency of financial
panics in civilized countries is for these
events to occur between longer and longer
intervals Of time and to be Of milder and
milder stress when they do occur. England,
France and Germany, while they have
had periods of financial depression in the
last twenty years, have managed to get
along without any of the panics known in
the old days. The reason for this is that as
time goes on financial operations the world
over become more and more conserva-
tive and are attended with a constantly
increasing degree of stability. Production
and consumption tend to equaize each
other with more and more evenness, and
violent fluctuations in their pace tend to
diss pp,ar. There is no reason why our
own country cannot now be classed in the
same category with the older nations. In
deed, so far as fall in prices is concerned.
we have had slow but vigorous panic
during the last year. The failures in the
eastern portion Of the country have natur-
ally inspired caution in business circles,
and the instincts Of Consu ners lead them
TO limit their orders to those Of the hand
TO mouth description. When these con-
sinners find that no exceeding smash in
commodity prices is probable they will
auy with greater freedom All this
!; producing a seasonable and proper
contraction In certain lines of business,
and the whole country will be better for
it when it is concluded In the iron and
steel situation, which seems still to be the
centre of discussion, the most favorable
element is the small amount of stoc Ks now
i'll the hands of pro lucing interests. For
merry. in times similar or nearly similar to
those of the present, it was the vast &C
cumulation Of such stocks that was the
most depressing factor in the iron and
steel market Now, happily, thanks to
the powerful hands of the United States
Steel Corporation and to the concerted
action of nearly all producers. there il
not. nor will there be. any such henping
no Of unrs,d supplies as there was, for
in 3tanse ten years ago. SO far as the
railroads, are concerned, they can only
profit from the Iessencd prices at which
they will be enabled to buy iron and steel
materials for use In all work OF new con-
structiou. and while some Of the railroad
companies will make larger expenditures
for bettermeuts in The future than in the
past-sUch a. the Gould lines for instance,
in the proposed work at New Orleans and
other places he major portion Of them