The Washington herald., 1906-12-09
THINK SHAW SHOULD GIVE AID
Traders Believe Railroads Need Cash
for Improvement More Than Other
Enterprises, as Larger Territory Is
Affected, and Prosperity Depends
on the transportation Facilities.


in the past, or If not disresarding them
taking them by contraries. New York
Central gets an increased dividend, and
promptly goes down, Union Pacific is in
dicted, and its price goes up. Call money
scars, and we get an all-round rally. 1t
is too much like trying to win when your
opponent has loaded the dice, and / for
one have grown tired of the game.
IF the Secretary of the Treasury has
no discrimination between speculation
and commercial requirement in afrording
relief TO the money market. where shall
the line be drawn? II is a weil-known fact
/ that railroads are compelled to halt ex-
/ tensions and Improvement projects be-
cause the Wall street money market
makes the raising of new capital pracu-
cally impossible. The same is true of in
dUstrial corporations. Is there any impor-
tant difference. for instance, between buy
/ ing new stock of AtchisOn. providing the
road with the means to purchase the ad-
ditlonal equipment necessary to handle
adequately the traffic of a large section OF
the country, and putting up the money to
build an extension to department store
I OF Il SuOe factory
/ And If IL is a difference, is il not IN
favor of the railroad enterprise. which af-
fects not alone the railroad, but the whole
section in which it operates-conferring
as a matter Of fact, much more benefit
on all the people scattered through the
roads territory than IL can possibly con-
fer on the railroad itself? II the greatest
good is to be done for the greatest num-
ber, are there not grounds to believe thai
relieving Wall street is the best way Of
accomplishing It?
As Wall street is the very heart of the
American financial system, Il will have 20
be considered that what tends 20 break
the heart win have the same effect
throughout the entire system"
Rates weakened decidedly in the
early part Of the week, but rose to I3 per
cent near the end. But the advance
had no effect on the price of the securi-
ties sentiment being buoyed up by the
assurance that the banks In the pool were
ready to act If the necessity should arise.
The object of the pool was to impose a
check upon operators at a meeting TO
force up money rates, by placing Sj0.OO0
600 where the lending of it could be direct
ed by one mind, so as to secure the great
est amount of efficiency.
No new money was brought into Wall
street, and there never was stronger
tvcrihcation OF the truth of the proverb
about strength in union than was shown
by the effect of the announcement OF a
determination on the part of leading
banks 10 act in unison. forcing other lend
ers 10 accept a reasonable rate. What
has revived interest in the money pool OF
1862 is the report that there IS a move
ment on foot to form a pool of bankers
representatives Of all parts of the country
TO handle part Of the Treasury's surplus
impartialIy in the interest of the CONNER
eta! and financial community.
y Secretary Shaw. il is said. might place
in the hands Of a pool of that kind
such part OF the SIS 0C0 .O00 now locked VI
In the Treasury as could be spared. ana
IL would be the duty Of the head of
the pool to lend for all legitimate pur-
poses when or wherever the rates for
money was so high as threaten serious
disturbance. The banks would not be
called upon to differcntiate between their
own money and the Treasury's money
for the latter would not be directly IN
their hands, but in the hands of the
pool to be used as much against them
to exact unreasonable rates for their owr
, funds as against any other lenders. Lead
I ing bankers say, however. that they have
not heard of any movement to form
such a pool, although in some influential
quarters It is said that a scheme Of the
! kind may have been brought forward
Z as a suggestion.
Demand sterling declined to 4S3 "a
, which started discussion OF the possibil
. ity of gold imports, but the consensus
2 was that if any serious attempt was made
to draw gold from London, the Bank oi
England would at once put up its rate
for money and place such burden or
0 American stocks carried over there. which
Y would make a heavy selling movement
y So serious did the possible consequence.
o seem TO the foreign houses they refused
0 to believe that Secretary Shaw would
not do everything In his power 10 pre-
vent their occurrence before 1t was too
late.
The general verdict on the bank state
ment was that 1t was bad enough to con
vince Washington that the time hat
come to secure the aid of the Treasur,
to withdraw money from the channels
While some of the younger element OF
the stock exchange laughed over th'
bank statement. seeing that prices haC
gone up, they should go higher on tn,
o prospect of a 80 per cent call rate in tn,
{ coming week, the more sober minded
J were inclined to view the situation in an
other light and to argue that unless ther,
was speedy relief lower prices must in
evitably result
Traders who argue that there is Httl.
difference between the money conditions
\ of to-day and those of a year ago, seen
to forget that time money rates ar
materially higher now than they wer,
then. At this time a year ago sixty-da!
: money cost per cent. and a commission
d making the equivalent of ! per cent
g while for ninety days to six months tn
rate was only per cent Now three an,
four months money costs per cent an,
l. upward, the rate of interest being, there
. fore from 1-3 to IL times higher than
y was then. This is a serious difference
Both I'm activity and strength Republic
Iron and Steel came nearer to being tn,
3 feature of the market than on any othe
70 day since II was admitted to trading oi
- the stock exchange seven years ago. Th-
stock made a new high record at az
: against a previous high record of 4Oss
and closed practically at the top. Prog
ress with the scheme to combine tn
Southern iron concerns WAS given as tn
, principal reason for the rise, although
was also pointed out that after psymen
Of the December dividends on the pre-
ferred only per cent of arrears on thi
issue will be left unpaid the commence
ment of disbursement on the common /
! brought within measurable distance