The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1904-05-15
THE WEEK in WALLSTREET
UysCRUPULOUs OPERATORS ARE BE-
ING OUsTED FROM EXCHANGE.
Redeeming Feature of Wall Street,
Says Nicholas, Is Strength of Bond
Market-General News.

the speculative markets There is nothing
academic in the problem. The simple fact
is that the outside public, or that portion
Of it which has any money left for gambling
purposes. has for some time been in a
semi-panic to draw down its accounts.
TO the multitude one Wall street name is
as good another. and the failure of
concerns like Floyd Crawford & Co. and
w. T. Woodend & Co. seems almost as
important TO the miscellaneous crowd of
outsiders as. would that of banking house
of international standing and high repute.
To the trader in 100 shares of stock, 5000
bushels of wheat, 1000 bales of cotton, go
barrels of pork or a few bags of coffee,
DR.. Woodend is as big man as J. Pierpont
Morgan; put and CALI trafficker on the
curb is as weighty an individual as Jacob
Schiff. To the tens of thousands of men
who speculate, all Cohens in Wall street
look alike.
Hence. when the news flashes over the
country of series of bucket shop fail
ures. followed by dozen or so expulsions
Of members from the Consolidated Ex-
change, and investigation into the business
alliances and standings of members of the
big exchange, there is aroused among out
siders a feverish desire TO save what may
be left of margins on deals in stocks or
speculative commodities. Every brokerage
and commission house in the financial dis
trict has felt directly and Immediately the
| effect of this scare. Thousands and tens
of thousands of accounts have been closed
and the money transferred to individual
bank accounts soaked away in the strong
| boxes.
4 The 10 nh I'd md
Of activity in the speculative markets will
cause it TO be forgot in an hour. 1t, never
theless. has present tangible form and can
not be ignored. There has rarely been a
time when the rank and file OF commission
and brokerage houses and banks in the New
1 York financial district have been in as
| sound and safe condition now. The
| vigorous methods of the exchanges to puri-
| fy their own moral atmospheres and to go
| cleaning, will, in time, aid materially in
! the restoration OF public confidence While
the process is going on, however, the dust
| raised has a terrifying effect
On the Stock Exchange or big board" as
! 1t Is sometimes called. the method of purif-
| cation is different from that conducted on
the Consolidated In the latter insti-
| tuition members are expelled for being
caught in the practice of fiagrantly dis
| honest schemes. On the big board" they
4 do things differently. When a case is
made out against a member he is called in
| and advised of his situation and the sug-
gestion offered that now would be a good
| time tor him to sell his seat. Neglect to
! heed the warning would be followed by
| formal trial and expulsion, and that would
carry with it the loss of the price of a
! seat, which at this time is approximately
| $4,000. The victim takes the hint and
! gets out. BY adopting this quiet course
| public scandals are avoided, and, at the
| same time, radiance of dishonest or offend
| ing members is secured.
| Within the last two or three years not
less than half dozen members of the
big board have been thus allowed to
| withdraw. On this list was one of the
most conspicuous professional operators in
the markct-a professional trader whose ex-
tensive operations were almost invariably
on the bear side For that and other rea-
sons he was unpopular with the mass OF
spectators and there was general rejoic-
ing when he was driven off the exchange
Half dozen or more members are now
under fire and in all probability will be
forced to retire The rules of the exchange
for the government of its members are very
strict and their violation brings offenders
sharply under the lash of discipline. The
! New York Stock Exchange has a member
snip of 1,O99 The original membership was
1,1OO One expulsion has reduced the num-
Der TO the former figure.
1t is held to be strange that an organi-
cation so rigid in the enforcement of rules
for the regulations of it's members and
the maintenance of individual integrity in
floor transactions should be so remiss in
ways and means for the protection of the
stocks and traffic in their shares. But fol-
the machinery of the New York Stock Elk
change 1t would have been impossible fol
| promoters and Syndicates to have worked
of upon the public the thousands of mil
lions in the shares of inflated enterprises
and hundreds of thousands of investor.
would have been saved the heavy losse:
about which they are now complaining ant
for which the kings of high finance ar,
held largely responsible-whieh served ulti
mately to bring discredit upon the entir,
financial community.
The redeeming feature of Wall street a
this time is the strength of the bond mar
ket. An Illustration of the absorptive quail
ties of the bond market was found Thu
week in the New York Central incident
Within five minutes after the marke
opened for the new s5O,Oo0.OO0 issue, not :
bond could be had. The entire amount wa
swallowed by group of strong houses hav
ing rich clients with abundance of none
to invest in good things.
There Is also large and growing de
mand for mlddle-claSS bonds, which rang
in price from 60 TO 50 or So There is ;
large volume of such bonds, which yield a
current quotations from 5l5 TO 6la per cent
and which are In reality as certain to pa
interest as the older and better-knowl
issues. The investment public is graduall-
finding this out and with the knowledg
comes Willingness TO take the securitie
and put them away in the strong boxes
In the opinion OF those whose judgmen
entities them to highest consideration tn
market viii be swept almost clean of soo
bonds or every description within wear
especially the railroad bonds or propertie
having the brightest future before them
Foreigners are coming into the American
bond market in droves. Three of the larp,
international bond houses, of which Speve
~ Co stand at the head. have placed wit
foreign clients during the last thirty day
more than SlGo.C000o0 of American raflroa,
bonds. The foreigners show a partialit
for Rock Island. Union Pacific Pennsyi
: vania, Atchison and Baltimore & Ohio.
Many of the standard stocks, as we'll a
those possessing speculative properties. ar
selling to-day at ridiculously low prices
Some of them can be had one-third lowe
than the figures that were commanded tw
{ years go. The combined three Rock Islam
issues, based on the old Rock Island stock
which solo at 20. can now be bought aroun
, | 100. st. Paul. which sold at 200 is no,
, | around l43. Louisville * Nashville was /
/, demand at 170; it is now about los. TTnio
Pacific Is off forty points and more. Atchi
, son thirty points. while Chicago q North
! western Is selling leo points below the pric
! | reached at the height of the speculative OK
| element, when 210 paid by Wander
| Dit brokers to retain control. Railroa
| stocks are certainly avera ging very 10,
? these days. Liquidation throughout the en-
! | tire list Is apparently over. The feebI
; | drives by the professionals produce not IN
. slightest effect. There is no more Ioos
! | stock TO be shaken ont.