The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1906-12-28
WALL STREET NOTES
Contraction of Business in
Coming Year Predicted.
STEEL TRADE KEEPS BOOMING
This Seems to Discount the Predic-
tiOns of the AIarmists, as Ii Is Com
sfdered the Best Gauge of CONNER
eiaI and Industrial Activity-NOtes
and Comments of Trades.

GAAAA
and Comments of Trades.
New York. Dec 27-Almost to a man
the Wall street traders have come to the
conclusion that the country is on the eve
OF decided contraction in business.
Various causes have combined to pro-
duce this unanimity of opinion, chief
among which is, perhaps, the interference
With corporation affairs on the part of
legislatures. State and Federal.
The expectation of a decline in the
country's prosperity has induced feel
ing Of conservatism if not of positive
bearishness. which may result in lively
times being seen in Wall street next
spring # the business activities of TIE
country should then show signs of con-
tinuing at undated pace.
It is quite possible that the general
opinion Of the business outlook is wrong,
for there Is absolutely no evidence so far
Of any change for the worse in the situa-
ton As the opinion has been made the
basis of a stock market position, il fol-
lows that if the opinion is wrong the
commitments made in accordance with
it must also be wrong. and if to set
these right stock must be bought. il is
easy to see what viii happen in the mar
ket.
When ever there is talk of a contrac-
ton in business it is natural TO look IN
the steel trade for signs of it. But
most careful scrutiny Of conditions in
this important branch of the countrys
industry fails to disclose any weakness
there. orders piling up in spite Of a
higher average level of prices tell Of
health and strength, and unless the pes
simist is willing to sacrifice all his blue
views of conditions, he had better not
investigate the steel trade too closely.
The whole tale Is told in the resist
ance which United States Steel opposed
TO the recent decline in the general mar
zet when the bears used pressure against
it. knowing full well that a heavy decline
in this stock would be more far-reaching
in its effect than one Of similar proper
tons in any other issue.
For the notable strength OF the United
States Steel issue various reasons have
been assigned. Some Of these have been
really ingenious, almost making it APP
pear as if the strength was more OF a
bearish than Of a bullish factor, as, for
instance, that large speculative operators
had been heavy buyers of calls on the
stock TO protect themselves against short
sales. and that the foreign buying, which
had been such a notable feature for some
sine past. was for the account Of the
option dealers who had sold the calls.
The buying Of steel, however. has not
been Of this kind. II has been Of the
most significant character. not for any
large interest merely. but for the &C
count of people outside of Wall street
who know the conditions in the industry,
and see no reason 10 place narrow limits
on our prosperity.
Stranger hands than mine" said the
elder Rothschild on his dedthbed, win
save the situauon-the hands Of The great
public"
It Is so in Steel. The stock is tn the
hands Of a discriminating public, and no
interest has made any effort to promote
speculation in it. or in any way interfere
with its market movements.
AS an indication Of Improvement in
the money situation. the purchase OF
100000 per cent bonds of the Chicago
Rock Island and Pacific Railway by
| Speyer & Co. vas regarded as encourag-
/ ing 1t is a long time since any road
! succeeded in placing bonds-the conditions
/ in the money market lettering bankers
/ from making purChases-and the hope is
! felt that the purchase just made by a
house that is among the most conserva-
/ tive in the city means the beginning OF
better conditions in money and in the
bond market
/ According to a dispatch from Montreal
to one of the Wall street news agencies
"a prominent director Of Canadian Pa
cifc. closely associated with all the mem
bers Of the board. says that not single
director of the company made any large
amount of money from the recent large
/ advance in the stock"
/ Here, perhaps. was a golden OppOrtu
nifty lost-but not necessarily so. The
whole matter may hinge on what would
/ be considered a large amount" though
more probably it turns upon the WORD
money" the profits being, SO far, most
/ Iy on paper The Large amount OF
money" may yet be made when profit:
! are cashed in.
The spokesman for the directors does
them a positive injustice IN trying Il
make it appear that collectively and in
/ dividually, they have been so lacking ii
optimism as to fail TO grasp in their Owl
stock one of the most attractive oppor
| tunities presented in Wall street in man!
months,
| In the afternoon the relatively greater
strength in Northern Pacific than in Grea
Northern brought out report that there
was still a line Of the latter specuIatively
held which might be forced upon the mar
ket if it was not disposed of at private
sale. The amount mentioned, however
was small, and 1t was felt that the situa
ton had been about cleared up.
Pennsylvania, which throughout TIN
break in the market maintained a fair de
gree of frmness, has in the last day o
two displayed positive strength, although
there has been no evidence of any aggres
sive movement to advance the price. Tn
Pennsylvania Railroad is to-day in a posi-
ton unlike that of any other railroad il
the country-there is no congestion o
traffic anywhere on the big system. Bust
ness is Of record-breaking volume for tn
season but Il Is moving with the reRti