New-York tribune., 1906-12-24
THE WEEK IN WALL STREET.


were based in great part on the operations OF
the pools. the dealings OF board room traders
and to some extent on the transactions OF fe"
powerful individual interests who appeared
o,,ite willing 20 buy securities at ruling prices
The so-called public was not in the market
This element has not been factor in specuia-
ton for many months. and to its absence may
he attributed the relative strength or prices IN
the face of extreme rates for money. II 'iere
had been a largo public following IN 'he iHS'
few weeks panicky conditions undoubtedly
,,o,,1a have developed twenty-five per cent
..u ,oore,, &c NOT conducive TO the health OF
marginal accounts. and the payment OF roin
10 10 per cent for time money does not Ten"
n increase commission business on the STOCK
Exchange People who have large suppheS o'
money find it profitable to lend the'r Lu'us
than to engage in stock market operaIoiS' @
il is an interesting fact that large amount "a
this kind of business has been done IN recent
weeks bv people who never before ventured 10
put their money in anything but STOCKS anu
honds. Large sales of investment securities
have been made the sellers using the proceeos
IN the loan market. the theory that even II
securities should not decline they would be abe
"a make large enough profit by lending then
money TO more than make UP for any loss thaI
might result in the repurchase OF their srareS
after the return of the money market to a nor
nal level.
The abiding faith Of the capitalists OF TINS
country in the future of all things That tenu 10
work for national prosperity is rejected IN theh
operations on the Stock Exchange in the VIII
ingness of large corporate interests to make
all Of goods
delivery and in the tendency OF the railroads to
add many millions of dollars 10 their capital ao-
count The requirements of trade have out
grown the facilities Of the big transportation
companies. and consequence the necessary
of physical expansion on the part OF these So
called arteries Of commerce becomes apparent
n every man who appreciates the needs OF the
industrial situation. People who criticlse the
large additions TO the capitalization OF the ran
roads should bear in mind that the country has
grown wonderfully in population. in wealth and
I'm all things that make for material prosperity;
they should bear in mind that the growth OF the
United States has outstrpped the mileage OF the
railroads and they should pay heed TO the con-
ditious Of the present situation in the trafhc
world, which perhaps the most remarkable
in the history OF the country. The railroads are
swauped with business Although they have in
creased their amount OF rolling stock in the
last few years. there IS not a single company
that has enough to handle the tonnage
Offering. And if the roads had thousands OF
more cars and locomotives they would not be
able to do much better than they are doing at
present. for the good reason that they have not
the available trackage facilities, especially the
roads in the West, which have TO depend to a
great extent a single track. The country is
growing and the railroads have got to grow with
it. Hence it follows that the companies must
raise more capital for extensions improvements,
double tracking. rolling stock. etc. ST. Paul is
building TO the Western coast in demand to the
traffic requirements Of the country and not TO
wage a great competitive war with roads which
/ already reach the Pacific. There is enough
business for all existing roads and for new lines
under contract and the theory which some
people hold that the current expanding ten
dency Of the transportation companies is a
good argument for short sales OF stocks is not
backed by any sound sensible conclusion.
Money market conditions continue to hold
/ stock market speculation in check and to dis
courage an active investment demand for bonds
but they have not interfered seriously with the
country's trade, though 1t is conceivable that in
the event Of the maintenance of loan quotations
at the current level for any further great length
Of time business circles will be seriously af
fected The New York banks have enjoyed a
dividends have been raised and salaries in
creased: but IL is a fact. nevertheless, and much
TO their discredit, that they have taken advant-
age Of the great demand for accommodation 10
advance lending rates TO an extravagant level
a level wholly unwarranted by existing condi-
tions. 1t IS true that the reserves OF the local
Institutions low. but il is not true that they
| are weak. There is an ample supply of cash
at this centre to meet all requirements and the
! demanding of more than 6 per cent for time
/ loans is not excusable by any consideration in
volying the present position OF the lending insti
! tutions. There is every reason for stiff rates
! for funds. but none for usury. Money doubtless
/ will rule at firm rates in the current week, as
/ the banks are in a position to demand about any
/ price they wish for loans, while in the year
/ there doubtless will be no development that will
! carry quotations 10 cheap level In the last
week of 1905 money call loans advanced 10
/ 100 per cent. but there no trouble in the
stock market. owing 10 the absence of public
/ trading and the great resources Of the men in
control Of speculation. Stocks are in Just rs
/ strong hands this year, and il is not thought
probable that a squeeze in the loan market in
/ The current week viii cause any important dis
| turbance on the Stock Exchange.
Stock market spectators have been more
moderate in their operations than have money
! lenders and spectators in other lines through
out the country. If crash should come as a
| result OF overeXpansion of credits at high rates
| in real estate. in commodities and in the various
! departments of the country's trade, Wall Street
| probably would be the least affected. And the
chances are that If Wall Street should detect
| signs Of approaching trouble II would gradually
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