Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-11-26
THE INSIDE OF
WALL STREET
BY EDWIN LEFEvRE.

The mystifcation of Wall street con-
tinues. 1t is not so much that there Is
dark mystery to be solved as that the
signs and symptoms by which professional
Wall street is guided in its reading of
the stock market continue perplexing, full
of contradictions, exasperating In their
double meanings. Now and then some man
tells you that he is a crazy bull and an
other that he is very bearishe but that Is
because they are temperamently impulsive
or intensely prejudiced The answer to the
average man to requests for an opinion as
to the market is a hesitating: Il don't
know
When a man speculates In cotton he Is
either a bull bear, cotton Is either TOO
low or too high, and this opinion Is modi-
fed not by the day to day fluctuations nor
by transitory technical market conditlons'
but by basic conditions such as the size
of the crop and Its condition OF growth or
by the condition of the textile industry, etc.
But in the stock market there are many
stocks to consider-to gamble Inland, gen
eral conditions being fairly we'll understood,
il is often a difficult matter to size up the
general trend for some stocks may be TOO
high and others too low, =, q. d e.
Prices of securities are always governed
by values and values depend on earnings.
The earning power of a corporation Is real
iy more important than the amount of dl-
vidends distributed to the stockholders.
That is why there are so many special
movements and why some stocks advance
or decline more quickly and more substan-
tally than others. At this writing the stock
market has been very strong, but really
active trading has been confined to few
stocks and these few have risen so sensa-
tonaHy as to arouse disquietude among the
self-styled conservatives" There has been
no difference of opinion as to underlying
commercial or industrial conditions; they
have continued highly prosperous.
The furry In money was neither as Sc
we're as some spectators feared nor as long
lived as some bankers hoped, but the money
market still remains a factor to be reck-
oned with by the great operators should
they decide 10 enter on an extensive bull
campaign and the high price prevailing
for the majority Of stocks apparently
checks speculative ardor on the part of the
general public. 1t Is the same state OF at
fairs that has confronted the speculative
community for many weeks, but this has
not deferred certain venturesome ciiques
from expressing their confidence in the flu
ture by means of the ticker. They have ac-
ycordingly marked UP the prices of their
specialties In an apparently reckless and
senseless fashion.
Transactions of one and a half million
shares in day that yet leave the sentiment
of the street at large altogether unchanged,
dLu bdufS PEI pltAtu DIS ever, Will IlOC-
cision of opinion the most prominent mental
characteristic Of normally shrewd observ-
ers, is altogether an unusual thing.
Men like John w. Gates, D. G. Reid, J.
Hobart Moore, Charles NJ. Schwab. H. C.
Prick, all of them steel-made n1illonaires,
are each of them capable of swinging far
larger lines of stocks than ever Mr.. Keene
dreamed of. and far larger lines than Wall
street a few years ago believed any indi
yidual could ever swing and not suffer from
insomnia. Then there are men like Loyal
Smith lately of Chicago, Mr.. Sweeney OF
Federal Smelling fame, Mr.. E ]. Berwind
James r. Keene, the smelter family of
Guggenheims, whose market operations as
individuals are on a scale that would have
made them epic campaigns in the old days.
1t is perfectly well understood, of course,
that none of these men is rich enough to
violate financial laws with impunity and
that against adverse natural conditions
they are as powerless as the veriest pau
pers. But they are men to whom the au-
gust displeasure of the great banking mag
mates signifies fifty percent less than moth
ing. They are at liberty to discount" the
future as they see 1t as far ahead as they
wish to, without waiting to receive permits
sion to buy or advice to sell stocks from
j. P. Morgan & Co, or Kuhn, Loeb e. Co
or ''26 Broadway" If they are wrong they
lose; If they are right, they win. And the
fact that they may be called prema tIlre or
precipitate does not deter them from doing
as they see fit. 1t is for this reason that
the street loses its bearings and its sense
of proportion at times.