The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-03-12
THE FINANCI.AL SITUATION.

1t appeared TO be the consensus in Wall
Street at the end OF last week, although,
OF curse, definite basis for such a conclu-
sion could not in the nature Of things be
furnished that the decline in stock market
valuations which has been going on pretty
continuously ever since the middle of Janu-
airy had progressed about az far az it Is
likely to unless entirely new factors of ad-
verse character entered into the financial
situation. Since the time named the av-
erage price Of the leading stocks dealt in in
Wall Street has. according to the usual
methods Of computation, declined ten full
points, and by other processes of reckoning
has aIlen in an even greater degree. The
voice OF experience is that such a reaction
az this is all that ordinarily happens in the
course of any security market unless at a
period OF depression in the business world
or at a time when Wal Street Ia demoralized
by some panic or sudden disaster, such
for instance, as the Northern Pacific panic
in 1901. Even in the Northern Pacific
corner the average price Of the principal
stocks fell less than Is points, though
some OF the stocks most actively traded in
made running breaks Of 80 and 40 points.
In the sharp decline which followed the
death OF Gov. Flower in 1899 the market
did not fall 10 points; and, in fact, for a de-
cline in prices Of a greater extent han this
the statistioian is forced to trace his records
back to days when the whole country was
suffering from hard times. The question
which first occurs. therefore. to observers
Of present conditions is whether there is
any proof Of such structural u~nsoundness
In the existing stock market as to reasonably
justify the opinion that the market can
be forced lower under prevailing circum-
stances. This does not bring up the ques-
ton OF the health Of business in the country
or involve any other point than the mere
technical state OF speculative trading. Was
the work of spectators for the rise carried
to such extremes In the latter part of last year
and in the fore part Of January that the mar
ket is still, after the great fall in 1t hat has
taken place, in an overloaded and top
heavy condition? Are there pool holdings"
still remaining that are a source Of danger
and are there great spectators who though
themselves rich a few months ago who are
now finding that their assets have 80 dimin-
ished that it is doubtful II they can protect
the stocks they are still carrying? The most
careful investigation in and out Of Wall
Street fails to disclose any ground for be-
liefs OF thiss sort. No doubt there are spec
ulators who nave discovered that they are
not as rich as inventories of their estate
taken January 10 last would have made
out. No doubt a large mass OF stocks for
merly carried by oliques has been thrown
on the market and sold at figures that left
to the sellers a much smaller profit than
at one tim. they had felt sure of getting.
D,,t 40 ,oIA~t not,,. ~ tIA r;t,,y;o- t.,
that this selling has taken place; that these
pooled holdings have to a vast extent been
disgorged and that the stock market has
undergone such a drastic purging as must
necessarily have immensely fortified the
position of banks, commission firms and
everybody and everything in the financial
district. One has to go but very little way
In Wall Street to find out how true this is.
Not only do the commission houses report
their lines Of stock reduced by from one-half
to two-thirds OF the amounts carried In the
first two weeks Of January, but that they
AVE also laid In such an abundant supply OF
time money that they are bothering very
little about the money situation for six
ahead at least. The stand regard
ing the market which has, with hardly an
exception, been taken by these commission
In the year thus far has beer praise
worthy in the highest degree. The leading
Wall Street houses have almost invariably
given conservative advice to their customers
recently regarding purchases Of stocks,
pointing out the obvious adverse contin-
gencies that at the moment threatened the
market and suggesting that it was more
than probable that following the boom in
values that had recently occurred a reao-
tionary movement was to be looked for.
The beneficial results OF this conservatism
are now very apparent. In the course Of
the decline there were few customers OF
Stock Exchange houses who had to be sold
out" and the fall has been conducted with
q minimum amount of trouble for everybody
concerned.
Is there, however, nothing in the con- |
dition of the business world or in the general
as distinguished from the Wall
Street position that makes il a reasonable
conclusion that prices Of securities may be
and Immediately depressedP The
more the business situation is examined the
more it becomes plain that matters there are
n most gratifying shape. 1t has beer no.
that there has been a little lull in the
ron and steel trade, but this hull IL it may be !
called such, only consists of the fact that
from the consumers in every branch
IF the trade having been placed practically
Tor a full half Of the current years require
nents ahead are now naturally abating
somewhat until the outlook for the crops
md similar important developments be-
more clear. A different state Of
could hardly have been expected,
nasmuoh as il were willing to
place and producers were willing to take
to be filed at more distant dates
he situation would be such az to imply
he existence of a semi-speoulative fever
n the trade rather than a sober considera-
ion of wants. Into whatever department
II trade or industry one examines there il
,nly presented evidence of buoyant and joy
Jus activity. The Western farmers and
planters, protesting the greatest
confidence in the future-as well they may,
or it seems that whatever the varying
Of the harvests in this country from
ear to year may be the worlds demands
or our cotton and foodstuffs have 40
increased as to make the
,roducfion Of theaa articles a Dermanant-