Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-09-10
THE INSIDE OF
WALL STREET
BY EDWIN LEFEvRE.

| street frequently as anywhere else. The
average professional there very often bases
| his operations, Willingly or unconsciously,
| upon his experience. His observation Is
| to no small degree measuring the present
by the past. That Is perfectly logical 1t
is more; 1t is sometimes wise. Granted Ger
tain premises, certain conclusions follow
as matter of course. It Is therefore evil
dent that when the reasoning has been
logical and the analogy between the mar
ket today and the market last year or two
years ago has been SO clearly established In
certain minds that the same result seems
inevitable, but nevertheless does not event
uate,' something has gone wrong. The
conclusion was reached by accurate and
logical reasoning, but the fault was in the
premises.
Today everybody is guessing and none too
confidently or successfully. 1t is probably
because the average mans observation OF
conditions is not accurate that the guess
ing is SO fruitless. What is called an AN
alysis'' of the stock market at any given
time is reached by the process OF observa-
ton and the knowledge of actual funda-
mental conditions. 1t is very difficult to
ity to reason logically. The facts, all the
facts nothing but the facts That Is:
knowledge, observation, the power to elm
mate the Observation-Disclosures are the essen
say man possesses when we speak of his
knowing men "intuitively," is apt to be
very expensive luxury In any form OF gam
bling or business. 1t may work with
woman who studies a man-there is no rule
for her likes or dislikes-but in Wall street
1t Is more unreliable than the lightning.
1t Is scarcely worth the dignity OF being
officially pronounced unfit for everyday use.
But it is so common that 1t can't be es-
capped. Mr.. Norman B. Ream, one of the
few philosophers Of the financial district,
told me once: II never buy or sell
stock because 1 feel it in my bones. It's
probably rheumatism"
The average professional. overworking his
nerves constantly as he does is every whit
as susceptible to the psychological waves"
that sweep over the street as the veriest
lamb. He is often bullish or bearish be-
cause of a "bone-feeling." Ask one of them
what he thinks and likelier than not he
will answer that 1.-The tape says down.,
or that 1t Cooks like higher prices, as
the case may be. The public takes its cue
from its brokers, and these brokers read
the news of the day. try to digest It, study
values and conditions, but, also, are thrown
into contact with the bone-feeling, tape
studying professionals and are Influenced to
some extent. Hence their own too fire.
quently Delphic advice. But primarily In
times of doubt the perplexity and hounder-
X
lsh the analogy between the market today
and the market some other day last year or
last century. Conditions may or may not be
identical. They may look at first glance
to be when on careful study 1t is seen
they are not
This country is growing all the time.
With the increasing density Of population
there Is bound to be at least a correspond
ing increase in the volume of business. That
Is easy to see. What is not easy to know is
whether the two increases have been COM
mensurate, as reflected by the prices Of GER
tain securities. There's where SO many peo-
pie fall down because they differ SO radi-
cally in temperament rather than in BRAIN
power Underlying conditions in the busl-
ness world may be very sound and technl-
cal conditions in the stock market itself
very unsound. The latter must lead to a
setback in prices, and the railroads and the
trusts may be increasingly prospecting at
the very time when their stocks are tum-
bling more or less violently. But II the
foregoing sounds childishly simple thus
stated, 1t nevertheless confuses the judg-
ment of those who are in the thick of the
fray
There come times when any professional
In Wall street will tell you that his judg-
ment is not as good as that OF far less
experienced man who Is away from the
ticker, beyond the influence of conflicting
rumors and confusing fluctuations. The
pr esent Is one of them. At this writing
the trend to judge from the looks OF
the tape and the general bone-feelng, is
downward. And yet after duly dscounelng
the optimism of interested merchants,
manufacturers and farmers throughout the
country, who are reporting great and gen
eral Prosperity, the principal argument or
h. or no n ha
high. That Is not always sound argu-
ment. 1t may mean less than nothing,
though In this instance there are beyond
question many stocks which certainly are
too high. Some have been raised to peril
Gus attitudes by the manipulation OF pools
and plungers, but others are selling high
because very shrewd capitalists have not
haggled over prices, but have bought the
shares at any price for reasons known to
them only. One cannot In this connection
fail to take into consideration the enor-
nous gold production of the world or late
and the decreasing purchasing power or the
gold dollar altogether irrespective of bust
ness conditions generally the crop outlook,
the steel trade, the copper consumption,
etc.
Next to the high prices of so many stocks
one hears most about higher money rates.
Advances in money rates, precipitated by
reduction in the amount Of funds available
for stock specializing purposes. have more
than once checked bull markets. because
the public finds its gambling. facilities cur
tailed and made expensive. But there have
been bull markets with money ruling at O
per cent, when other or fundamental condi-
ttons were favorable. Usually thcre Is
august bull market and September
decline" There have been exceptions. This
wear was not one of them. But all those
doubts are aggravated by the fact that the
general public has not been trading actively
and is not overloaded. The people In
cluded In Lawson's system" would not
profit very much by a Misunderstanding
sIInp. indeed Lawson himself says 1t is
the tntouitous big men who are overloaded,
go tbat q crash would crush them But the