Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-12-19
bull 5 And BEARS

=
Special Dispatch to The star.
NEW YORK. December 49, Ordinarily
the speculative community does not re-
| ceyer in day from such = shock to COM
adence as that administered by the coli
lapse of the Walsh banking institutions in
Chicago yesterday and neither does the
stock market ordinarily reflect this shock
fully in one day The worst stock market
effects Of the downfall of the Bigelow Bank
IN " vaukee this year were not shown
until veral days after the announcement
o. the allure. The process of adjustment
| usually follows regular lines. There Is frst
heavy selling of securities, both for long
and short accounts. which Is likely to pc
prcportioned to the expenditures and grav-
lty of the news.
Supporting orders are rushed in and the
market ordinarily rallies from the first blow
with good deal of vigor. After that prices
are apt at least to sag for a few. days.
Sc metimes they go to new low Levels, ae-
cording to the final construction which Is
placed on the event that upset the market
in the original Instance or to the nscassi-
ties of the individuals and interests that
find themselves directly involved or hurt
by the affair. What the market does after
that depends more on fundamental conoi-
items that go TO make values rather than
on the speculative position
The Chicago wreck was regarded this
morning as likely to give the stock market
the best test 1t has had for many q day In
the last two years the upward movement of
security prices in this country has never
been more than temporarily checked by all
kinds of bad news and unfavorable develop
ments, whether they were expected or not
In fact, one should go further back than
that % a he maj 1xpt haq all along
been in the upward swing that started after
the first election of Mckinley, and the as
surance that this country was firmly estab-
lished on Al gold basis.
Since there has been a wonderful indus
trial expansion, keeping pace with great
and worldwide gold production and in the
period that has elapsed the stock market
has endured the shock and strain of un-
pleasant or worse events abroad and at
/ home, Including the Beer war. the second
Bryan scare. the great steel strike of 1901,
uprising in China. with its yellow peril spec
ter: the Northern Pacific panic and the va
rious unsettiing aspects of the Northern Sc
curities struggle. the year of liquidation
from early in 1903 to 1891 while undigested
securities were being absorbed and market
values were cut In half; the Russo Japanese
war, the Baltimore fire, and, among other
DEVELOPMENTS of the year now ending, the
revelations of misconduct in the managers
of some great corporations and Judiciary in
situations. Yet today the average level of
security prices in this country is the highest
ever known. That something more than
speculative manipulation accounts for the
endurance of the market goes without say
ing.
1t is an interesting fact about the collapse
In Chicago that 1T includes national bank
trust company and a savings bank 1t
was of course. the alliance of these three
Tvs tf.,t,1 ~,
impossible. for the national bank examirl-
ers to detect the banks situation, but the
unholiness of such alliances as these has
been pretty well demonstrated in the course
OF the insurance revelations Of 1895 and
the perturbation of investment and specu-
iatlve sentiment Is not diminished because
the national bank examiners We're helpless
in this case until the state authorities made
an examination of the state institutions CO.
incident with theirs.
1t is also n interesting fact however, and
one that Is of great importance to spec,l-
lators and investors just now, that impor-
tant banking interests here knew several
days ago how sorry was the plight of the
walsh banks, yet these interests were buy
ers rather than sellers of securities at the
end of last week. 1t is another fact that
call 1t what you will-prosperity. business
activity, great crops. a gold infa alton, or
ascfibe it to a combination of all these plus
something more-there is, in the opinion of
deep students OF financial and commercial
affairs. wonderful power at work uplift-
ing values.
In order to carry out extensive improve
ments, the Southern Steel Company re-
Gently organized to take over the Alabama
Steel and Wire Company of Gadsden, Ala
and the Underwood Coal and Iron Com
pany, has decided to issue s., eo00o bonds
to be secured by a mortgage on the prop
erty.
oF
present year. 1t is estimated, will total in
value $4,000, 900, an increase of about ST.
0O0.000 over 1904. which held the record IN
to that time. These heavy imports have
been made in the face of steadily advance
ing prices.