New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1905-09-11
THE WEEK IN WALL STREET.


dustriaI prosperity in the United States. stock
market prices are beginning to reflect extensive
liquidation for the account of speculative pools
and traders who. through unwise operations
now find themselves overloaded with securities
ct time when all indications point toward
higher rates for money. Last week the asso-
ciated banks of New-York made a most drastic
cut in their loans. They were compelled to take
this action owing to their dwindling cash hold
ings. and consequence Of this loan con-
over stocks that were being carried on borrowed
money. The amount Of liquidation on the Stock
Exchange was heavier than ordinarily supposed,
but the fact that so much stock passed from
the hands Of the financially weak to the hands
Of the financially strong should not be taken as
surety that the decline in values has run its
course. In many we'll Informed quarters of the
Street it is believed that further liquidation will
be reported before any important change in
favor of higher prices develops, but it is con-
coded, nevertheless, that the weakness that may
be recorded in the next few weeks will be fol-
lowed by better quotations than any so far
made in the Wall Street market. It is not rea-
sonable to expect a period of great bull activity
when local bank reserves are less than SIS O0O-
600, when there is a tremendous demand from
the interior for funds for crop movement pur
poses and for the requirements Of a big mercan-
tile business, nor, the other hand, is it rea-
sonab1e to suppose that in view of the excellent
trade situation in the United States the high
credit which the country has in the financial
markets Of Europe and the favorable outlook
for long time Of domestic trade expansion.
there will be any decentralization in the coun-
try's securities markets outside OF declines
which may result from reckless bull specula-
ton
The declines recorded in last weeks market
bring the average loss in the last fortnight to
about five points. This decline merely was
continuance Of the downward movement that
began shortly after the signing Of the peace
treaty between Russia and Japan. representing
movement that was purely speculative in
character and long overdue. to say the least
Doubtless many spectators expected pro-
tracted advance on the announcement Of peace
They simply showed themselves poor judges of
the security market, and especially Of the way
in which Wall Street operates Wall Street al
ways is dscountfng the future. It operates
the probable outcome of events. The best judges
had no doubt that peace would be arranged as
result of the Portsmouth conference. and they
bid up stocks in absolute confidence that peace
would be declared. AS has happened number
less times before when the announcement
actually made spectators who had been bid
ding up the market attempted TO realize profits,
with the natural result of a general recession
in values From an investment point of view
the situation is safe; from speculative point
Of view 1T is somewhat dangerous. The best
judges in the Street counsel extreme conserva-
tism and suggest buying only for quick turns.
al tai n
tiaI rallies. without question, some of the pools
which have been conspicuous in their operations
for advance have been liquidating in the last
week, while it is a noteworthy fact that there
has been little support to the market from either
the banking or larger speculative interests In
deed, the banking element has appeared to be
in favor of reaction from the abnormally high
level, as it has been evident that prices in many
cases have been higher than justified either by
present or future conditions.
AS matter of fact the present reaction is
excellent thing for the securities market. II
does not indicate any change in the general
trade situation. It means return merely to
normal conditions. The general business situa-
ton is thoroughly satisfactory, and there is not
a single cloud on the horizon. now that peace In
assured between Russia and Japan. The out
look for business could not well be better, and
the railroads are fairly blocked with traffic
shortage of cars being reported from all parts
of the country. To meet the increased demand
from shippers the railroads giving large
orders for rolling stock, the Pennsylvania alone
recently putting out order for more than
sixteen thousand steel cars The prices of some
securities have been altogether out of proper
ton with their true value. Being absolutely arti-
fetal and professional it did not, therefore, take
much effort to knock the props from under the
market last week. and the natural desire by the
professional element to convert paper profits
into cash the signal for bear activity 1t is
we'll enough to sneer at Thomas w. Lawson of
Roston-and this appears to be the attitude Of
Wall Street generally to-day-but careful OBJ
servers of the market consider it absolutely
foolish to ignore Lawson a market factor at
this particular time. While for the sake of
argument, it may be granted that he is actuated
only by motives of gain. it is not to be denied
that a great many thousand people consider him
sincere, and believe his every written word.
Thousands more are actuated by a desire for So
called revenge on the Standard Oil Company,
believing that they can ascribe to its methods
of doing business their own troubles. Lawson
asked for 81, 100000 from the public: he asked
If TO go into blind pool. to bear stocks sup
posed TO be held by the system" He an
nounced that he and his associates had Sc GOO
600 TO use in his bear campaign. This made
100000 in all Judging from the confident
way In which he has been hammering the cop
per stocks. he may have obtained the money he
asked for While his prediction of a violent
slump in the price of the metal has been only
partially verified, the mere fact that drop in
price followed the publication Of his prediction
undeniably- welded a considerable influence.
Lawson was clever enough TO select the psyche |
logical moment for his sensational announce
ment and attack. The result has been patent to