Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-09-24
Financial News Letter
BY W. G. NICHOLAS.

NEW YORK, September 23.-The stock
market Is more than eever a two-sided affair.
Banking interests are sharply divided as to
the desirability of higher prices in the near
future. although seemingly of mind as
to what the course of values should be later
on. Wall street is just now troubled with
an embarrassment. of national prosperity.
There is use for SO much money and credit
in handling the crops and providing for
legitimate demands in every quarter that
only thin margin of surplus remains for
use in speculat ton. The conservatives hold
that the truest friends of the market will
b serving their own interests best as well
as those of the general market by holding
off and awaiting the natural return move
ment of money from the outside. The
chronic bulls are impatient, however, and
anxious to begin dlscounting the effects of
gel erous crops and universal buoyancy.
Many of the rich operators have provided
The nlselves with abundant time money upon
which they are paying interest and which
they want to use in the stock market. They
are met with inside supplies of stock every
time they jump into the market, an ex-
perience which discourages them nightly
and causes grumbiing without measure.
A representative of one of the big shippers
associations said to the writer a day or
two ago that railroads, through the opera
tons of that REIMBURSEMENT and evening
up of freight rates entered upon about
three years ago, have been able to raise the
tariffs from 10 to 300 above the average
prevailing previously. He volunteered the
further information that the railroads had
been exceedingly stealthy in working up
rates, and that the work had been SO clev-
erly done that the public IS a whole is
still in ignorance of what had been going
Chi IN elf
ton thoroughly. If this statement be true
the fact as given will go a long way to ac
count for the extreme bullishness of the
powerful financial interests behind the lead
ing railroads of the country. These inter-
ests have been steadily adding to their
holdings and have almost exhausted the
floating supplies of stocks In some
cases. The concentration of stocks in
the marvellous features of the market dur
ing the last three years. Broadly speak
ing, there has been practically no public
in the market since the liquidation of 1923,
but prices have continuously advanced for
a year or more. Manipulation has been
given the reason for upiift in prices, but
this explanation is shallow and INSULT
cient. The stocks have simply gone into
the hands of the rich men who run rail-
roads. They have positive and accurate
kI cWledge of the extent to which rates
have been moved up, and they know pre-
cisely what it means In increased revenues
and enlarged property valuation. Cotnci-
dental with this development in Wall street
there has risen a need for stupendous In
vestments on the part of railroads for IN
creased terminal facilities in all the large
cities, for new equipment and for still
further reconstruction of road beds, tracks,
etc. This has called for. additional hota-
ton of securities, for large borrowings and
70 : every phase of railroad financing. Pay
rolls have been swelled, both in number of
men employed and in the amounts required
for wages The increased cost of operation
offs or ha VP-
nues 1t also goes to prove the necessity
TO- the REIMBURSEMENT and evening up" of
rates referred to.
The loan item in the statements made by
the clearing house banks fails to- reflect
the exact situation In one important re-
spect 1t does not take into account very
large aggregate of time money arranged
for by the commission houses and wealthy
individuals. much of which is allowed 10
remain idle in banks to the credit of bor-
rowers 1t has become the custom Of many
rich men and institutions to make their
money arrangements well around the cor
ner of the new year, merely as matter of
insurance against the furres and tempe
rary periods of stringency such as are
Liable to occur during the last three or
four months of the old year. This condi-
ton OF affairs is understood by a majority
of thinking people in Wall street but Its
lie at large or by the horde of light.
weights who do most OF the talking, but
who seem to have failed utterly to find an
explanation for the low interest rates.
x
The erstwhiie debonnair and gladstone
George w. Perkins is certainly cutting
sorry figure before the public just now.
The statements made by him w,.;l such
e.iy frarkness White on the witness s:a9d
l,ok differcnt 4 cola type. Down ia VAN
street hey are an.andly recalling NJ Ncr-
gan's opinioa thor lis young partn3" could
not ill the dual position of banker end
financial manager of an insurance COM
pany, and they are saying that Mr. Nor
gan's judgment in the matter was sound.
Furthermore, IL has leaked out that Mr..
Morgan IS augered beyond measure over
the publicity attaching to Perkins rank
iugg7e In the sale and repurchase OF that
$3.50 600 block of Mercantile Marine bonds.
in which the versatile prodigy placed The
banking house in a mot questionable posi-