The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-04-30
THE FINANCIAL SITUATION.

'SSSalN VI q ICiIN Vi pr " bllOSh AG
at first more or less stunned by the blow,
then for a time. perhaps, rallies all his faoul-
ties by supreme effort, leaving it seemingly
doubtful whether he has really suffered
anything from what has happened, but who
in due course finally exhibits the oonsti-
tutional effects OF the disturbance, 80 the
stock market, after it had withstood The
first brunt Of the bad news from San Fran
cisco, was for q period Of one or two days
inclined to treat the event as something
that was not at all serious; and then, finally,
was depressed by the inevitable force OF
circumstance proceeding from the I'M
fortunate affair. This depression did not
really make its appearance in the market
until the beginning Of last week, and it
was due, apparently, to the dismay with
which spectators realized the fact that
there was an immediate and enormous
call upon tho Eastern financial centres to
send money to the Pacific Coast, not 30
much for the end Of relieving suffering
there as for the purpose OF reinforcing
bank reserves. This drain Of funds was
in progress throughout the week and it
upset the security market. There Is not
the slightest question that much or the
selling Of stocks during the week was in
the nature Of speculation for the fall and
that bear commitments in the market
have become exceedingly common. Oper-
ators Of this kind became moro emboldened
naturally as SUCCESS attended their efforts
and as genuine liquidation, increasing the
floating supply Of stocks in the market
made their attacks practicable. Still. on
the whole, it was liquidation that was the
feature Of the weeks business, and it be-
came clear that definitions would have
to be revised concerning the character
of the strong hands" In which, as has
been so often and 40 correctly said recently.
stocks were lodged. The term, however,
has been commonly and incorrectly taken
rs meaning Il lookirs up of stocks for in
vestInent, as if the situation was such that
nothing but an absolute deterioration OF
value of these securities could force them
to a sale; but it seems that stocks were.
to a greater extent than had been realized,
held speoulatively on margins and that the
strong hands that possessed them were
simply strong because of the large margins
with which the speculative account were
protected. Emphasis is, in other words,
again laid upon a characteristic OF the
market in the last few years than which
none has been more notable-the large
individual speculative operations in the
district. There are reasons for
believing that on Monday there was liqui-
dated an account open for the rise for a
single SPECTATOR upon which, despite the
fall in prices, a large profit was secured;
and yet the name of this Spectator, if it
was mentioned, would probably not be
to one person in a hundred even
among the daily frequenters of Wall Street.
All this has been made possible by the trc-
mendous increase in the wealth and pros
perity of the country in recent years. FL
nancial resources have accumulated in
the hands of market operators on a scale
hitherto unknown. The buying and sell
ing Of these men in and of themselves are
sufficient to make what Wall Street calls a
big market, and although 1t also obviously
makes for a greater permanent stability of
he market than ever before experienced,
it yet attests that il is still possible for
stocks to be offered for sale upon the de-
velopment, from a speculative point of
view, of an unfavorab BILE influence.
At the close of the stock market on Satur-
day, or in barely ten days since the news
was received of the earthquake in California,
the Amalgamated Copper and Union Pacific
shares had fallen 13 points; st. Paul, IA;
Brooklyn Rapid Transit, IA; Reading and
Colorado Fuel. II; New York Central and
Louisville and Nashville, 10; Pennsylvania :;
Northern Pacific, 20; Great Northern pre-
40, and so on. The general fall In
he prices of the active stocks averaged
1 points. Admitting that there was sub
,tantial p%rovocation for weakness in the
market, it seems in all conscience az il the
lecline that has occurred has gone absolutely
)eyond the bounds of reason and has been
produced by what must be regarded from
very sane point Of view az a mere hysteri-
,al selling almost approaching the panic
INIT. The financial bearing of the Cali
disaster wholly consists Of its i'm
1~ortance as regards the money market.
let the money market in the last fortnight
las not altered at all, nor can any banking
Iuthority, worthy to be called such, be
luoted in support of the opinion that
INV higher rates are likely to be quoted
or money in the near future than
low prevail. Why, then, should there be
such frantic selling of stocks? 1t will
doubtless he found when he storm has
passed that one reason for the unexpected
md apparently uniustifable break in the
market was that powerful banking interests
vailed themselves Of the opportunity
presented by the exigencies or apparent
,xigencies of the situation to take such
as to put n permanent curb upon the
.ctivity of various plunging spectators
Who have for n long time been n menace
O a stable and orderly conducted move
nent for the rise in values. If this has
,een accomplished. it IS certainly cause for
generalization. Views rega riding the ulti-
nate effect Of the calamity are, in all high
luarters in the financial community, by
10 means pessimistic. 1t Is obvious, of
course, that difficulties have been thrown
n the way OF that immediate rise in the
market that was confidently looked for a
title time ago. But there is no ques-
ion that money in San Francisco itself
will be very abundant and that a stimulus
o productive energy arising from
he fire will be plainly felt. The
government is freely increasing it's
'eposits in the national banks in San
and elsewhere as a measure
f relief, and this means practically the
rim ging of so much new money into the
market; while it is believed that gold i'm
orts here in the next few months, if from
O other cause than the remittance of for
ign insurance money, will he large. All