Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-06-04


few days ago recalls the famous saying
OF the head of the greatest banking house
| in the world. A man who was discussing
| an important deal with him said: This Is 9
matter Of business. not sentiment" AND
| Baron Rothschild retorted, MY dear sir
| business is sentiment" This Is SO obviously
| true that in Wall street there Is not bank
| er, broker or professional trader that does
not recognize it. Oftentimes you do mol
hear that underlying business conditions are
| good or the reverse, that the security prices
| are too high or too low. All that 1t Is nee
eSSary to say Is that sentiment is cheerfu
| or depressed. The rest follows. If the pub
| lie feels we'll it is bullish; IL 1t does not, II
| Is bearfsh, or, at all events, non-bullish,
| which Is next door to bearish. 1t seems
as though the contagion of example Is IT.
resistible. For lack of a better name or
better explanation 1t has become the fash
| ion to allude to these spasms of public feel
| ing as psychological waves. Now and then
one of these sweeps over the community
and the ticker duly records their extent
and intensity just as though its mission
were to keep tabs on the heart-beats of the
specializing world. In the end 1t is the
public who is the great buyer of stocks.
and IT, is from the public that the great
fnanciers fear to get their stocks back.
It is indispensable to industrial and finan-
cial success that sentiment should be favor
able no less than basic trade conditions
Time and again manipula1ve campaigns
have failed disastrously because sentiment
| rather than the business outlook was not
propt4ous. The late William c. Whitney
| and his associates, exceptionally shrewd
| men, all of them having an abundance of
ammunition at the financial arSenals, other
wise the banks; coo-headed and unusually
| apet.a nod At hn nf
| in great measure responsible five years age
! for what was called rich mans panic.
Mr.. keene, when he formed his famous
| 400 0G0-share pool in Southern Pacific. mis-
| calculated several things. such as monetary
condi tons. the downward swing of the
| business pendulum Mr.. Harriman's abili-
| ties as stock market enemy, but more
| than all the others put together. the state
| of sentiment" Greater financers than Mr..
Keene, men like Mr. Morgan for example
! familiar with Wall street and with the
American temperament. possessing sources
| of information which enable them to keep
| in touch with Industrial. commercial. agri-
cultural and financial affairs in the north,
south. east and west of the United States,
and indeed the world over, have more than
once been amazed by the condition OF SEN
timent And their amazement reduced their
bank accounts. at least for a time. Given
sentiment in sympathy with manipulation
in either direction there is no limit to the
success of a stock market campaign. A
mold sentiment and not content himself
with advancing or depressing prices by the
sheer brute force of dollars. During the
past eight years the big men have in
augurated and carried through TO unpre-
cedenTed success exactly two campaigns
the earliest and hardest work of both Of
which was the preparation of the public
| mind in order to develop a cheerful senti-
ment. 1t might be said that in the fore
going instances the use of the word senti-
| ment is Misleading or inaccurate. But it is
not. Sentiment is sentiment and not senti-
| mentalism. Every business man is famil-
lar with the extent to which sentiment en-
| tiers into their customers operations.
x X
1t is therefore a psychological phenome-
non with which the captains of finance
more than once are called upon to reckon.
Dollars can do wonders at times when the
state of sentiment is propitious. This fact
has amazingly often misled the great
plungers known as the western crowd
into the greatest of offenses known to Wall
street, namely, the losing of money. 1t is
very easy to ascrbe failure to the under
hand Vaccinations and unfair devices Of
envious financial magrates, of powerful
foes who can direct certain banks to play
dirty tricks etc. 1t sounds plausible enough.
especially at this time, when frenZied finan
cial writer's would have the country be-
lieve that the SYSTEMS power is irresist-
ible and their lieutenants ubiquitous. It
also soothes the wound to the vanity of
the aforementioned plungers from the west
But the fact remains that the signal fail
ure of certain recent bull campaigns by
the westerners was due 70 their having
failed to take into account the state of
the publics mind Their manipulation may
have lacked finesse. they may have disre-
garded a few rules which eastern operators
observe because it pays, but the westerners
failed merely because they thought they
could swing sentiment and they did not
Their operations were really market
turns" but on such a gigantic scale that
the tactics of big campaign were proper.
There never has been and never will be a
stock market leader like the late Roswell
p. Flower It was not his own money. nor
the vast resources of his enormously rich
associates nor his shrewdness as busi-
ness man, nor his judgment of security val
ues and investments that made him what
he was Neither was it his unfaiiing OPIUM
ism nor his sagacious habit of telling the
truth. But he was, to begin with, intensely
American. He was a seif-made man who
had lived and worked among and known all
sorts of people His natural abilities made
him a good reader of character. and his
early life and his later experience as a
politician in Congress and as governor of