The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1903-09-29
Failure OF the sII7.OO0.ooo Console
dated Lake Superior Company
Bad Sign of the Times.
BANKS ARE GROWING CHARY
AFRAID TO RISK MORE MONEY IN
UNPRODUCTIvE INTERESTS.
Industrial Needs for Credits-vfewx
Of jacob III. Schif.

NEW YORK, Sept 2S.-wall street spent
another gloomy day, which was devoted
mostly TO trying TO puzzle out where the
unending stream of liquidation came from
and what caused IL. Information on the
subject or even authoritative opinions were
extremely hard TO get 1t is pointed out
that the great bankers and capitalists were
not heard OF in warning last year during
the high range OF prices while they were
seeking profitable market for their hold
ings at that level
From this it is inferred that the buyers
of a class which decides market movements
would not be heard of in melting others
to buy If they were themselves seeking
securities on cheap terms in the present
market.
There is, in fact, rather a notable lack OF
public quotation of authorities pointing the
cheapness of stocks which has been heard
from time TO time during the course OF the
long decline. and at price levels consider
ably above the present. But IL is equally
true that men seeking a market to realize
ready money at forced sale OF securities
are not likely TO miss any means of con-
cealing their transactions. The source OF
selling orders in the present market is a
battling mystery and inference usually
drawn from the personality of the brokers
employed are almost invariably at fault.
The conditions which prompt the liqui-
dation and the probable limits of its ex-
tent are consequently the subject of grave
disquiet and apprehension.
SUNK CAPITAL is LOST.
1t was the failure OF stock jobbing oper-
ations that brought the early selling and
the losses represented were almost wholly
on paper, as the previous gains had been
But later episodes represent the failure
OF enterprises in which extensive capital
had been embarked. demonstrably unpro-
ductive employment. Capital thus sunk is
capital lost.
Controller Ridgeleys opinion, expressed
before the Maryland and Washington bank
ers, that "a large percentage of the loanfng
power has gone into unproductive inter-
ests," formulates the dread of Wall street
over the present situation. The reaction
in the iron and steel industries. the high
interest rates. especially on mercantile
paper. and the curtaiment of production in
other lines caused the fear that overex-
tension has spread to industrial and COM
mercial lines. representing additional .un-
| productive interests" 10 be followed by
| liquidation and contraction.
toward conserving the commercial and in
dustrial means for credits. and TO this end
they are inexorable II all promotions and
financing projects. The miscarriage of these
projects is still the cause of most OF the lio-
uidation. While the majority Of Wall
streets prominent men show a decided dis
inclination to talk for publication, inquiry
among the very highest financial interests
|
or untoward character is apprehended.
JACOB H SCHIFF'S VIEWS
Jacob III. Schiff, Of Kuhn, Loeb & Co..
commenting upon the stock market and
financial conditions, said: 1t is simply a
| fever which must run its course, just as
we had a buying fever two years ago. and
even last year. So the selling fever has now
taken hold of the people. and reason counts
for nothing. No matter what may be said
as to the causes which have brought about
the present situation. prevailing conditions
throughout the country do not justify the
existing great decline in substantial secur-
tiles. The time will come when people viii
wonder how conditions such as we see now
| could have existed.
"It does not appear likely that the much
feared money stringency will materialize.
| In fact. money is abundant now. only those
who control the supply are afraid, in the
| uncertain state of affairs. 10 part with IL
The consequence is that have a supera-
| bundant supply OF money on daily call
while time money cannot be had IN large
| amounts. But this change. especially as
IL is almost certain that with the inability
of corporations TO finance their require
| ments, general business throughout the
| country must after a time. fall Oft and
when that moment arrives we shall have q
| large amount of funds seeking employment
These surplus funds will. 10 some extent.
oetermlne the esioe ol our Nor ordinary
cy and we shall again witness an increased
demand for securities So that IL Is not az
all unlikely. though this may seem paradox
ical that when railroad earnings begin 10
decrease because of reduced general business
values of railroad securities win again be-
gin to increase.