The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-07-01
GOSSIP or WALL sTREET.'

With al due respect 70 the opinion cited
above Il must be sald that II 10 q condition
and not q theory that has confronted the
Stress, The case ID similar To tho sale OF q
house or Of Q watch 70 moot some pressing
necessity, Now speculative interests have
been carrying large limos Of stocks In Wall
Street and for various reasons have. been
obliged to enter the money market recently
for che purpose of raising funds. In many
cases they failed to- secure the money In this
way and therefore came under the necessity
OF selling something In order TO tighten their
requirements. The necessity involves indi-
vidual hArdships. but the course taken tends
to promote the ~soundness Of the general
situation.
When IL becomes necessary to eel stocks
on account OF conditions In the money market
the seller are likely to select those which
have the widest and best market, A spedula-
tor having. for instance. considerable lines Of
Union Pacific, Steel preferred, Locomotive,
Republic Steel, Missouri Pacific and virginia
Chemical would be likely to start liquidation
with Union Pacific and Steel preferred and
to go through his list disposing Of the most
salesble and holding on to those for which
only Q limited market could be found. For
this reason the weakness In the Steel issues
gives no oluo to tho real condition Of the
trade. The market rejects at present tho
necessities OF individuals and not the, state Of
the steel Industry. That the latter is entirely
satisfactory 10 testified to By all competent
authorities. r
II 10 not to be supposed that all the selling
Of the Steel stocks or OF other prominent
issues represented real liquidation. The
speculative element 10 always present In
Wall Street ready to take sides according to
the evidence Of accumulation or distribution
which may be afforded by the trading. In
the present instance the speculative selling
begun before the real liquidation and the
lower range Of prices which VIVA caused by
the former contributed In no small degree to
the necessity for the latter through I'M
pairment Of margins.
The Steel lssuea and Pennsyivania made
new low records for the year and this natur-
ally helped the decline In other parts OF the
list. For years Steel and Pennsylvania
have shown q disposition to move together.
presumably for the reason that az the steel
company contributes O large part OF the
trafilo of the railroad their values are founded
or the same circumstances. Such an argu-
ment Is not entitled to much consideration
at this time, for II there has been any iustl-
fcation for the decline In Pennsylvania II
10 to be found In the heavy increase Of capl-
talization which has induced many persons
to consider seriously the question Of whether
the road can continue to pay it's Q per cent,
dividend pending completion Of the work
In progress and the receipt Of additional
revenue from the expenditures on the New
York tunnel and other important projects.
There Ii no such question In regard to the
dividend on Steel preferred and therefore
no reason why this stock should be affected
by the weakness In the other.
-
The bigger the volume Of a stock the less
danger Of a squeeze. as n general rule. and
hence the courage with which the bear clique
sold Pennsylvania and the Steels. The
prominence Of the stocks and the disturbing
influence which a decline In them was sure
to exert furnished q motive for attack.
A keen Judge of the market expressed the
opinion that the short interest is now larger
than at any time this year.
With the end of the session Of Congress
some brokers were inclined to believe that
purchases might be made for q rally. and 80
advises their customers. hut the RESPONSE 20
such advice was very small The average
trader could see only liquidation and the pros
pect Of further decline and made up his mind
that the best side of the market was the out.
side. From present appearances 1t looks as
IL there would be very few small spectators
to take profits on the next advance. at least
in the early stages. =
Some conservative brokers have come to
the conclusion that when the Street comes
to review the work of Con gress 1t will find
that a lot Of real good has been accomplished.
Even the meat legislation Is regarded as by
NO means useless. since the aflxine OF q Gov
eminent stamp will. 1t is believed, go a Ions
way toward preventing the recurrence OF
periodic agrarian agitation In European
countries against this important article OF our
exports. An agitation rejecting on the In
tegrity OF the Government Of the United
States VIII not. 1t Ia contended. be allowed to
assume such proportions as q political factor
abroad as q similar agitation directed against
a comparatively few citizens Of this country.
People who get their inspiration from
inside circles In American Smelling and
Refining had tips to buy this stock at the
opening. Those who acted promptly on
the advice got the stock at about the highest
level of the day, but others who waited for
q soft spot before making their purchases
had a fairly good profit to their credit by the
time the market closed. The buying ap-
peared to be good, but there was no news or
rumor to account for It beyond the sugges-
ton that the short interest had become
very large.
The New York Central was affected by the
weakness In the Pennsylvania group, and
the stock met but little support on the de-
cline There was q good deal OF talk about
the relatively small return which the s per
cent. dividend rate afforded on the market
price Of the stock. but as this utterly lost
sight of the liberality Of the New York Gen.
trail management in the matter Of granting
rights, which for several years have added
materially to the average returns to stock
holders, 1t did not appeal very strongly to
the most intelligent class OF traders.
An active house which was prominent In
the selling Of Steel preferred a few days ago
sold about 10000 shares OF Union Pacific yes
terday. The impression In the Street was
that this ceiling represented liquidation of
stock bought higher up. As for the buying. 1t
appeared to be good and conservative interests
said the stock was not dear for investment
around the present prices.
One of the stories about the selling OF the
Nm stocks was that the holdings OF an estate
mo- in process Of settlement were coming
upon the market, Another theory was that
there was liquidation Of a speculative account.
and of course the fact was not forgotten
~rA n liz