Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-05-20
Financial News Letter
BY W. G. NICHOLAS.
pecial Correspondence of The Star.


NEW YORK, May 10. 1906.
The market action In the stock issues of
United States Steel is being watched more
closely than that of any other stock on the
list for the reason that 1t is almost univer-
sally rega rded as the best-known barometer
of business conditions. The steel trade
feels the ebb and flow of business sentiment
and Of business expectations as accurately
and as unfaiingiy as the delicate mechan-
ism of any instrument devised for telling
the, weather. Just now the wise men Of the
financial world are giving their closest at
tention to the order books of the big steel
corporation and acquainting themselves as
best they may with the feeling and tone or
the trade. In many conservative quarters
the opinion was held that this year would
witness the elimination of the long period
of high pressure activity in iron and steel.
They could not see how there could be rea-
sonable hope of further prolongation of the
amazing demand for the products of the
iron mills and the allied industries, and
there was manifest lack of optimism in
the expressions voiced by the conservative
element. OF late. however, a change for
the better is noted in sentiment re-
fiected In quarters where heretofore doubt
has existed. Word sent back from the out
posts of observation Is almost universally
encouraging. Not the least hopeful sign Is
the willingness of railroads to project
themselves into the next calendar year
with large orders for rails.
There was rather too much red fire and
stage play to the fiotation of that Sc, 600 600
Pennsylvania loan As a spectacular dem
onstration In high finance it may be de-
scribed as a bowling success The piece
was staged with keen appreciation of
slip. The street swallowed without ques-
ton the official announcement that the loan
had been oyersubscribed and that banks
and other Investment institutions were hun
CRY for more. AS showing of good credit
the Incident was impressive, as it was in
tended to be by those in charge and by
the banking interests concerned. In the
enthusiasm over the fiotation of the notes
the fact Is temporarily lost sight of that
the money was borrowed at a high rate
OF interest. because the time Is unpropi-
tious for selling bonds to advantage The
loan is a stop gap expedient to provide Inn
mediate funds for the stupendous terminal
improvements and betterments project
ed and under way. There are times
when huge borrowings by corporations
cannot properly be called builish fac
tions. They are bullish at the begin-
ming Of a business boom following a long
period OF duiness. when there is a untyer-
sally recognized need Of physical recon-
struction and extension Experienced has
taught that when it becomes necessary to
borrow heavily to finance the last stages
of such reconstruction then the sit
uation changes somewhat and gets draggy,
General complaint Is heard that the bond
market is dull and overstocked with goods
ranging from gilt-edged clear down into
the doubtful list. Another full year of good
times and big crops viii be necessary for
the successful distribution of issues already
authorized and printed
THE fooIfpo ~ trritat9o.,
Washington has communicated itself In full
measure to Wall street. and everybody who
Is interested In stocks and bonds will be
heartily glad when Congress adjourns. al
though fresh cause for uneasiness viii
follow in the Inauguration of political cam
paigns. The snarl over the rate bill is leav-
ing very bad taste In the mouth Of the
public. and the Washington situation ap-
pears to be full Of trouble and complica--
tions which excite more than passing In
terest In the financial section. There has
never been a time since Mr. Roosevelt's In
cumbency at the White House that feeling
against him has run so high In Wall street
as now. That fact may not reduce his
popularity with the masses. but 1t Is men
toned as q matter OF current history.
Members of Congress of all shades Of polit-
zeal belief agree that the democrats have {.
good fighting chance of electing majority
OF the members OF the lower branch Re-
publicans who have been in New York
lately are very outspoken In this respect,
and some of them are uncharitable enough
to say that II the complexion of the House
should change It would be another piece OF
Roosevelt luck. This view is based on
the theory that 1t would be Impossible for
him anyway to carry some OF his am
bilious projects through and that with
democratic House he could have a valid ex-
cuse for failure. Wall street hears of these
things and has become quite school for
political discussion lately.
There is small likelihood that the free al
cohol bill viii so through the Senate In thu
shape 1t passed the House. The treasury
will be safeguarded in every way. and Il
may be many years before the whisky trust
realizes the fun bene1t OF the increased
production Of alcohol permissible under the
law.