Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-07-29
Financial News Letter
nv. q. srcHor.as.

N ". g. EToHof.A1.
NEW YoRK. July =. 1905
The stock market has way OF going
counter to programs and charts and FORE
casts which ID q puxzle and disappointment
to the wise men who try to look into the
future and tell q waiting world what 70
going to happen to prices. Last winter
nothing was palmer. according TO the very
generally accepted theories of these wise
men, than that the market was going to
have great boom during May. June and
July. in order to permit bankers. specula-
tors and inside interests to unload their
stocks. thereby escaping the tight-money
discomforts of next faH and winter. This
late-in-the-year period Of stringency was
to be attended by skyscraping interest
rates and terrific slump Of stocks. What
happened during the first half Of the year
ts OF record. The spring and summer was
like baboon's instep: II made hole in
the ground. Everybody was seized at the
same time with an impulse to get an early
start and to sell their stocks first. without
waiting Tor the advertised advance. The
fall break In the market began in April
and kept right on for nearly three months.
resulting in q slide which carried Some
stocks down 100 points. and caused an
average shrinkage OF about $50 share
through the entire active list. 1t now be-
gins to look as though the forecasters
might be as far out OF the way the last
half Of the year as they were the first half.
In anticipation OF tight money later on
nearly everybody In Wall street has made
arrangements for all the time money they
may need to carry them into 1907. GUAM
titles Of this money are now being loaned
In the street by brokers who loaded up
with more funds than they have any pres
ent use for. and there is likely to to be
pressure from that quarter clear down to
the end of December. All OF which may
70 20 he rfxor NJ Jy,ta
est rates and to the encouragement of bull
speculation in stocks.
AZ
Mr. Shaw Is one OF the first Secretaries
of the Treasury to arbitrarily bend Wall
street to the government interests in do
ing it's financing. The custom has been for
the treasury at Washington whenever It
had any bonds to float to first find out
what the big bankers In Wall street might
think about the proposition and how they
would receive It. There were always
''pickings." more or less rich for Wall
street every time the government had any
bonds to sell or any refunding schemes to
put through. On the Panama bond oeea-
sion. however. Secretary Shaw took the
other tack having received hint that
the big banks look with dlsfavor on his
project for selling S3o.e0o.0OO issue on
terms which would realize for the treas
ury every fraction 1t could get instead of
allowing for the customary rake off," He
virtually took Wall street by the scuff of
the neck and gave 1t out cold and fiat that
II the banks did not respond in proper
spirit they need expect no treasury favors
IN the future. as long as he had the say
He did not put 1t In those words but the
fntimation was clear The bankers took the
hint and made the bond issue the GREATEST
success of any Of the minor treasury opera
tons In fifteen years The transaction
In thn Of w
street more than anything he has ever
done
A favorable balance of over $500. 600 600
In the years volume of International mer-
chandising revives interest in a question
which has always been more or less of
puzzle. namely: What becomes of these
recurring great balances which appear In
the annual statements of exports and Inn
ports? Those balances range from $780,
100000 to 1000. and on the face
thereof We should by this time have about
all the money In the world. Last year the
balance of $517. 900, 900 might very properly
be REINFORCED by the addition of at least
$20e per capita on an immigration of 000-
900 souls. total of $500. 900. 900. The real
balance is therefore approximately $780, :
100000 instead of $500. 200. 900 in round
ngures. There has also been going on dur
ing the last two years a heavy foreign in
vestment In American securities. The ag-
gregate Of our stocks and bonds held abroad
at this time is conservatively estimated at
81, 900, 000, 900. OF which ESQ must go into
the account for the years 1904-05. Directly
ohsetting this may be enumerated fully
5000, 900. 600 spent annually abroad by
American tourists. 500. 900, 900 expended In
ocean passenger fares and ocean freight
paid to foreign vessel owners, 100000, 600
in interest and dividends and possibly S25,-
100000 in interest on money borrowed in
London to carry American stocks for
speculative account. favorite device of
many of the rich operators In Wall street
Ii the international bankers could get to-
gether and compare notes 1t would probably
be discovered that European and British
capital Is employed to a far larger extent
than generally believed in the financing of
American enterprises. International ex-
change brokers have a fair inkling of the
volume of this kind Of Indebtedness, but
the public at large has no conception Of the
real figures. America is favorite field for
the employment of surplus European cap
ital and growingly so. for matter what
the money can't be drawn down by its
owners. It's use in America Is attended by
| minimum risks and yields the best average
returns.
The death OF Russell Sage created not the
slightest ripple Of excitement in the stock
market. Neither did it give rise to express
sions OF personal grief. for although the
great money lender spent nearly fifty years
of his active life In Wall street. he formed