New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1904-07-31
The Financial World.

prices fell on the European Bourses and -
vousness developed. whereupon the un.b,,,.,
element OF Wall Street jumped to an lnr,aa,.,
conclusion that the situation meant war D.
fessional spectators long of stocks has...s
get rio OF them and take position on thu So
side and those who were short increased -,
lines The result was day rssvo of declfr.n-
prices, attended by the usual contraction -
business evident of late when quotations Fan
Then. upon more reassuring adviess quick -
covery ensued.
The declines the war scare. revealed -
significant fact-the relative strength or 81
New York market compared to London. p.~,-
and other European centres. Doubtless 49,,
war would cause some depression from so,,
mental reasons and from the desire of fo,
owners Of our securities to convert then, ir.
cash for speculative ventures of vars,,-
kinds This has always happened under sros
circumstances, and probably always viii. R
it must be recognized by reasonable peopIa tb..
IN such an event American securities wouid o.
cupy an exceptionally strong position. Frro
pean WARMTH the United States unfnvoIvs5
would inevitably breed large stimulus 10 Amer,
can commerce. increasing the demand for pred
ucts of our mills and factories. augmentinr ~.
demand for food products, and tbarehn
swelling railroad revenues These considar,
ness Of the bear side of Wall Street 10 .a,.
alarm at any happening whatsoever
After all the declines in our market wsb -,
war scare or were no greater than thosa a.
perieneed in any normal reaction on an pn,-a~
movement 10 is the opinion of expert ~
servers that a reaction was due in anv srsn.
and might fairly have been expected to r,,r :.
the extent 1T did without the disclosure Of ~,
war element. Significant is the praeticaIt,
unanimous report from banking houses ana -,
portant brokers' that the stocks sold were ~,
investment hoIdings-that no scare was srou.of
among actual holders OF property This wa,
signally testified tn by the sustained strap,tb
OF the bond market. which declined the mares,
fractions whils stocks were losing points Tbar,
was good deal CT selling OF speculative Iop
stock which had been bought ar lower POINTS and
upon which stop loss orders had been entered =.
preserve profits; and this was an effective all
TO the reactionary movement; but the great
the main. factor was enormous short ssII,n, a.
bears whose ardor had been danDened Inv IN,
protraeted rise of the last few weeks. ana wh,
faneied that in the war situation their ebapc.
had come to negative favorable home conditions
Ihat they made a mistake seems now 70 be as
sured
Another clear market revelation Is the ev,.
counts in commission offices. ANY Wall Street.
man knows full well that had such a sit,,,+,or
existed the precipitation into the situation of m,
war scare would have been followed for the tim,
being by semi-panicky cenditions-and nothina
of the sort dsveloped-cIear proof that securftfe,
are strongly and intelligently held-not to BE-
iorced 10 sale by any passing fright. Thus the
technical situation IS strengthened-it seems A
hopeless effort on the part of the bears 10 dis
lodge real stock wherewith 70 I'll their con-
tracts. leaving the short position-tarring I'm.
foreseen Observation-Disclosures and hazardous
Apparently short contracts must be filed by
open bidding in the market. and should this
state of affairs last il will end in the game o.
bear eat bear.
Apart from the apprehension Of war nothing
has occurred to weaken general conditions. Tn,
weather has not been ideally favorable fc,
spring wheat. but serious deterioration is not
yet reported; and prices under the pressure OF
both cash and speculative demand are on a
level-sratifyins TO growers-and the much
criticised option system of doing business en-
abIes the farmer. il he so chooses to sell his
crop for future delivery at whatever price ths
SPECTATOR can make. That large numbers ot
farmers organize and effect such sales is well
known. Conditions are more than excellent for
the corn and cotton crops. although both havs
vet 10 pass through some months Of uncsr-
taInty.
Industrial activity. too. is surely. if slowly.
reviving-as evidenced by the report Of tins
United States Steel Corporation for the quarter
ended June so, showing earnings sufficient to
pay interest on funded debt and dividends on
preferred stock. while passing 10 surplus ac-
count so.T50O0o. The deficit of the first guar
ter Of the year is more than made good, and
for the first six months of 1905. There has
been attempt to belittIe this excellent show
ing. but facts and figures are practical, whiIs
bear argument" is theoretical. and unfairly
speculative. United States Steel Corporation
managers are keeping faith.
Business revival signs show Indeed all along
the line. They may not yet be extraordinary.
but they are real and significant. one example
alone-orders for safety equipment fov 10000
freight cars. received this month by the New
York Air Brake COmpany-can fairly be &C.
cepted as evidence OF a convincing character
With the great railway systems of the country
giving such orders. improved general business
conditions cannot be a long time in doubt
In one part of the market particularly Their.
forcefui evidences OF conditions changed
10 the better-the traction stocks take on Kew
attractiveness. And il variety OF indications
normally trustworthy may be relied upon We are
likely to materially higher market values
for both Metropolitan and Brooklyn Rapid
Transit. II is not natural and ON no tar
grounds can there be explanation that Metro
politan with per cent dividends guarantees
should be selling down where il is. 1t he'onss
40 or III points higher-the legitimacy and char
acter of its dividend guarantee being assures
OF course, during the underground systems
construction there has been such a tearipg 70
and obstruction of New Works. thoroushfarss