The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1906-04-29
NyN@YsA11@S THE WEEK IN TRADE AND FINANCE SNDzVSy
Features dInrnan EdW hnHT
Goapfh he MnNh Make Markets Move ~
GREAT NORTHERN SMASH

UAaAA NVN j M1RN DMADA
It is a long time since anything so
important, SO generally disturbing, and
so little understood, has been seen in
Wall street as the smash in Great
Northern stocks this week. In line
with the entire list, the northwestern
roads had been on decline, since the
San Francisco news began to come.
Several days of weakness and slow ;
wearing away Of values preceded the
sharp break. Then, in market weak
yet comparatively stable, and with
other northwestern stocks affected only
as was the genral market, Great North
ern broke away and fell twenty-seven
points with rush, while its sister
stock, Northern Pacific, broke fourteen
points.
That these two stocks should have
declined so heavily, might be &C
counted for on the ground that they
were too high, as indeed they probably
were, yet other stocks were high that
did not decline much, and the two
leaders in the break were already well
down from highest points. No part of
the country is more prosperous than the
| northwest, and no extent of country
has so secure future as that traversed
by these lines. The northwest, and the
Pacific northwest, have drawn the at
tention Of the investing world for
years, because of great opportunities
presented, and never more so than OF
late For the immediate future every
thing is bright, the railroad earnings
large, new immigration is pouring in
| onto q ra
starting, new towns springing up, and
the Pacific coast and trans-P acific trade,
| which is becoming 50 important con-
sideration, is showing healthy expan-
sion. With it all calamity worse than
anything heretofore known has befallen
another part of the country, the effect
of which, not only in its final working
out, but in it's immediate showings,
should be favorable to the northwest
transcontinental lines, and the terri
tory they serve. Yet these two roads
of all others suffer heavily in the
market value Of their securities, while
other roads, in for less direct, and i'm
mediate, and probably later losses Of
! a permanent nature, as result OF the
disaster, are affected only moderately.
No more striking illustration could
be found of the contrariness Of specu-
lative market. - i>('. r. =.
There are two ways Of accounting
for the anomaly. It may reasonably
be supposed, for the legitimate argu.
ment, that insurance companies that
, sustained heavy losses in the San Fran
! cisco fire had their surplus money, in
some part, invested in Great Northern
) and Northern Pacific; that when they
came to estimate the extent Of then
liability they, tried quietly to turn
! securities into money and did market
t part during the days Of small ant
! steady declines; that they miscalcu
: lated and put the pressure on toe
! strong, or that some one violated al
2 agreement and tried to liquidate frs
J and secretly, and that some speculative
/ holding on margins was reached, ane
5 the crash followed y. .~a~.
: There is another plausible reason
e The big moneyed men who own most 0;
these stocks and control the roads real
,, ize that while they have been absurd,
q high on a revenue basis, Great North
g ern selling recently at price to re
y turn the holder only about IA pc
% cent net, they have back Of them man.
!, things working out for greater valu
! from year to year = They might evel
- be pushed to new high levels in month
Il to come, especially if the country turn
i out big crops and everything prosper<
l. But these magnates who carried then
l. up from far down the line and turne
. part Of them into cash around tor
! would want them back again befor
" this happened, yet they could not bu
- them without running up prices O.
~ themselves. The San Francisco dis
d aster and the general belief that it wi
is work out benefcially to the mort
d Pacific ports and the country eastward
q could only make them the more anxiov
X to get themselves in line for profit b
r. enhancement. The thing to do was
o. o. smash the market hard. Magnifyin
" the trouble in France, circulating tn
rumor Of the impending collapse Of
big insurance company caught wit
1e heavy losses, and at the same tin
= rappIng the market whenever 1t locke
weak, the bears broke it. just who
- the bear raiders on the exchange fo'
n represented no one can tell. But TT
81 pressure was heaviest in the two stool
y that went lowest, Some one bougl
81 them at the lower prices. 1t W;
= a highly successful piece Of manipul
81 tion.
y The general effect has been to unse
Nl tie confidence, and investors are sh
" There are many things to indicate tn
4 the San Francisco disaster has spe1
~ it's legitimate bad effect, but while II
& trend towards depression is on mo
o)) serious declines are not improbabl
z Meanwhile there is the total Of $2(
81 900, 900 gold due to arrive in New Yo1
= within ten days, which ought to relie7
81 the fear Of money scarcity because
y the transfer of great sums to the Z
M} cifc coast, and. there is general SUI
Y mary covering the country in all lin
& Of commerce, and embracing the col
lu 10 mn