Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-01-31
BULLS AND BEARS

L
Special Dispatch to The Star.
| NEW YORK, January 31.--So far as the
| Judgment of men long trained in the bust
ness goes. bond dealers have prosperous
year ahead. A careful canvass made in
the last two days shows that most of the
| largest bond houses in wall street are
convinced that 1908 will be the best year
| in their history. It Is obvious that.
barring such new high-grade issues as
may be put out. and 1t does not appear
| that the leading railroad and Industrial
corporations are planning to float any
great total Of new securities, the bond
| business of 1906 will be done chiefly In
| the so-called speculative grades
The strength and activity Of speculative
bonds lately has shown that the strong In
vestment demand. now stronger than
through all the period of tight money at
the end of last year. has begun to ac-
knowledge the impossibility Of satisfying
Itself with securities of the higher graoes
and has turned toward the less seasoned
bonds and those of second or no mort,
gage character. A big speculative BOND
business this year was predicted last year
in eminent banking quarters.
| Convertible issues and income bonds
have already manifested that they were
meeting with deal of INVESTMENT
favor. Meanwhile participation IN sucn
eagerly sought. Good judges of the hnan-
cial situation say that, despite all the tals
about heavy gold exports this year anu anu
the requirement of active industry the
bond business will be materially heipsd
by a rather protractixe period OF reahy
easy money, as illustrated by the stase ot
the bond market. 1t is a striking fact ina.
more than $6,CGl.G01 of the Sl.IS4.Uo OF
Chicago, Rock Island and Pacific Railway
Company first and refunding mortgage
per cent gold bonds purchased by Speyer
% 90 laws have alreaQY Deen
sold privately to large institutions. along
| lines that have been intiinated mere III Is
now said that in more man one uaI.el
II is believed that Union Pacific will play
an important part in the amalgamatlon OF
the Vanderbilt railroad. An interesting
current report is that W. W. Fanderpiit
Holds 175O0o shares of Union Pacific.
Opinion in the financial and speculative
community this morning was that the
United States Steel Corporations report
yesterday afternoon was not only really
good, but much more favorable thaa con-
sentative optimists had expected
Stock exchange houses generally con-
strued the report as a bull point on the
whole market. Apropos of the story which
the tape tells, rather good reader of that
mysterious running legund said this morn
ing OF yesterday s market:
From o'clock until about 2:30 prices
broke anywhere from to Is points. To
the veteran the signs were unmistakable
Tom, Dick and Harry, anybody and every
body. was seller previously. Yesterday dur
| ing the last hour some one of great i'm
! portance financially was hurt. The tape
| tells as clearly as any personal narration
| the particulars of how some one stood out
| for several days against a normal reason
| able reaction and finally had to instruct
| his brokers to let things so because he
would not respond to margin calls
X
ITO draw balance in this particular
| persons affairs is impossible. The llquida-
| ton might have lost him all his paper
profits. 1t might have lost him all he had
| besides Moreover. one big speeulat tor does
not make the market There were plenty
| of others, smaller, III the &s-ne boat. when
once the market began to give way.
An important contribution to the liter
ature on the subject of trust companies
and cash reserves is made by George w.
Young in the North American Review for
February out today.
Assuming that the present per cent re-
Strlclions on trust companies are adequate,
and answer the purpose of protection to de-
posters better than do the cash reserve re-
quirements applied to banks, he reaches the
conclusion that "a cash reserve is neither
ors." In furtherance of his views opposed
to trust company reserves by law, he says
| in part: Ten years ago there were IN
The state of New York thirty-eigft trust
companies, with capitalization of $29, coo :
000 and deposits of 1907 900, 900; today there
are elgnty-one, with an aggregate capital
of S63,0C0,UD increase for ten years of 2I0
per cent In the city of New York; ten
years ago twentyseven companies had cap
| tal amounting to $27000,000, and deposits
of $291 900, 900.
To-day forty-seven companies have s56,-
100000 capital and S1,010 100000 deposits !;
the increase has been nearly 24T per cent
as compared with increase in the de-
posits of national banks in New York city
for ten years of only 1876 per cent This
leads Mr. Young TO observe that trust COM
panies; without reserves, are as solidly es-
tdblished in public evidence as our national
| banks, with compulsory reserves. He fur
ther assumes that il the present system
were radically wrong" during the past
thirty years many failures would have re-
shifted which is the