The Washington herald., 1906-12-14
Traders Not Alarmed by the
Decline in Stock Prices.
WANT TO FIND ROCK BOTTOM
When This Is Reached, Conditions
VIII BE Better for All Concerned
spOnd to Favorable News and
Manipulation Is Seen.


conservative broker. and large amount
Of stock has been shaken out of specu-
lative hands to find a more secure resting
place in the opinion of large interests.
So far the situation is improved. and
/ 1 think that when money conditions
change for the better. we shall have a
substantial rise in the market. look
for improvement in the money situation
1 from Secretary Shaw's relief measures.
and from the Liquidation through which
the market is now passing. Both cOmbin-
ed viii be sufficient, although without the
latter the other would have been wholly
/ inadequate.
Not until rock bottom is reached will
the market stop its downward course.
/ That may be about now. or it may not be
reached for some time longer. but the big
/ interests are delving away. No more
drilling to find how deep down bed rock
/ lies is now In progress, but shoveling is
I going on IN a way which promises that
10 matter how much remains to be
/ cleared of. it will be removed before a
rest is taken. When rock bottom is
/ reached It viii be entirely safe to start
| in to reconstruct prices
/ Said a member Of one OF the largest
/ and most conservative houses in the
/ street, everything about the market has
/ been right except money, and in the ad-
vance Of the money market, no fault can
/ be found with the quality Of the goods.
/ but we cannot find enough customers
/ wanting our kind Of wares TO furnish the
demand for what we have TO sell
/ Take steel for example. Our house
/ has carefully looked into the condition
/ Of the industry, more with view Of
rot there were the first signs Of the
weakening in the industrial situation
/ which We would expect to find Ia the
steel trade 81 anywhere, but instead Of
weakness we found a condition of such
astonishing strength that had We known
/ Of Il earlier We would probably have gone
4 In and bought all we could lay hands on.
1t Is much the same In the copper
trade, although in respect 10 this ! am
speaking from hearsay, and l think Anal
g2mated Copper is cheap enough for any
man to put his money In. VIII the public
come and buy il, even with the prospect
Of an Increase in the dividend rate? That
remains 20 be seen. Frankly I do not feel
.
be put up higher before the end Of the
winter. but unless the public comes IN the
market must inevitably slump IN the end. ."
When the market fails TO respond to IA
vorable news, as has happened frequently
OF late. il is safe to assume that II is very
largely in the hands Of professionals. who
discount every occurrence before It is
actually announced. and IN the absence Of
the demand which formerly came from
the general public, they try to sell out to
one another as soon as the good news be
comes generally known.
Operations Of this character do not ac-
company the distribution Of stock outside
Of Wall street, as the principal changes
are from one set of speculative hands To
the other. leaving the floating supply at
the end OF a movement just about where
IL was at the beginning. Perhaps the only
way TO get rid Of the professionalism Is
by forced liquidation, such as was witness
ed to-day.
The professional trader makes no secret
Of his belief that the market Is manipu-
lated for the purpose Of sellinug stocks
He believes this and Is wary when ne
sees manipulation for the rise he joins in.
but with the feeling that unless he is very
"
however, he ventures too far. and. as in
the past few days. has to pay the pen
atty.
81. Paul was the one exponent of bull
ishness. the last vestige OF the bull mar
ket that had been. The reason WAS found
in a revival Of the rUmor that rights Of
value would be granted in connection
with an issue Of new stock upon the light
Of recent developments the traders took
to mean that lemons were to be sold at
melon prices. II may be otherwise, how
ever.
St Paul has not sold any preferred
stock for many years. and if it should
do its financing by sale Of the preferred
at par now. the rights would be more
valuable than the street heard. Two
directly opposite views were expressed
regarding the wide difference in the ac-
ton of St Paul and the Hill stocks. One
was that Mr.. Hin and his followers were
selling Great Northern and Northern Pa
cific and buying St. Paul; the other that
Great Northern and Northern Pacific
were increasing their capital to fight ST
Pauis extension. and that St. Paul con-
templated an increase of its capital to
fight the Hill roads. Both stories were
more or less vigorous, but neither was
true.
The great railroad interests of the
Northwest have no idea of pelting money
at one another. The present is no time
for any such pastime, and recurrence Of
the Old-time railroad wars need not be
feared. st. Paul is going to the Coast To
fiji transportation needs to which the
present roads could hardly cater, and a
single track will not suffice for very long.
either. Within a comparatively few years
all the great tTanscontinentals Of the
North-Great Northern, Northern Pacific, /
st. Paul, and Canadian Pacihc-wilI have
to be doubled-tracked, if business is to be |
adequately taken care of.
Another story of the interesting. if
true" order, is that James J. Hill. who
is not GS years old, has made up his
mind to retire, and that the Great Nor
thern and Northern Pacific melons are In |
the nature of his parting gift to stock |
holders. There is, however absolutely
no foundation for such a report II /
would hardly add to the glory of Mr.
Hills career if he retired while his stock |
was under fire. At 6S he is still in the |
prime of his power, and while there Is |
work to do and he has strength 10 do II. /
he will be found in harness.
At 30 for Great Northern, the rights |
have value Of about 81, which deducted I
from the price of the stock. leaves an /
equivalent of 179 as the price of a I Der
cent issue. This is about L points /
lower than the current price Of st. Paul l
the difference apparently discounting a |
good part of the prospective rights in lat /
ter.
Even If as was rumored, the State of |
Minnesota proposed bringing suit to tes. |