The Washington herald., 1906-12-17
MARKET IS PUZZLING
Violent Breaks and Rallies in
Stock Confusing.
COUNTRY'S BUSINESS IS GOOD
DnOP In Great Northern Not Entirely
Decentralization Are That Large
as Is Money supply, 1t Is made
guate to Meet Demands for the
Expansion In All Lines.

were
many features OF strength in the stock
market last week. there were other
decided features Of weakness. Violent de-
clines were succeeded by equally violent
rallies, and the entire movement OF
prices was so unsettled and irregular as
6 TO confuse the judgment Of ordinary OBJ
servers concerning the real tendency Of
values.
For several days previous to the be
ginning of the week the most potent in
fluence of a market nature that was ex-
erted was the money stringency and
varying views as to when and how. if at
all, the Secretary af the Treasury pro-
posed to do anything to relieve it. The
bank statement of the preceding week
had disclosed a deficit Of over Sc. 5O0. 600
in the surplus reserve. with a large drain
from the local banks to the subtreasury
still in progress.
The market, therefore, was strong upon
the ground that a situation so bad as
this must be quickly remedied-that is to
say. that it was such as 10 call for i'm
mediate relief action by the Treasury
Department, and last Monday the market
Treasury did not make any announce
ment during business hours as it was ex-
pected he would.
Relief Not Complete.
Late in the afternoon on Monday. how
ever. came the news that the Secretary
had decided to put $2oOQ0,OO0 in the banks
over the country in various ways, in ad-
ditiOn to the S12.OOO.0OO to be disbursed on
December Is in anticipation of interest
money on the government bonds due
early next year, and the market on
Tuesday therefore rose rapidly.
On the succeeding day Wall streets
JOY over the relief" Of the money situa-
ton became somewhat qualified In
patience was manifested over the delay
that would under the most favorable cir
cumstances take place before the relief
could become effective, while questions
were raised as to the exact amount Of
money disbursed by the government that
was likely to become available for use
al this center Later in the week other
matters began to occupy Wall streets
attention; money rates in the meantime,
although ruling lower than previously,
still being such as TO check speculative
operations for the rise.
Break in Great Northern.
Announcement by the Great Northern
Railway Company of Its purpose 10 issue
S60,GoG000 of new stock TO shareholders;
and the expectation of a similar an
EOuncement involving. as was believed,
an issue Of something less than SOD, CO.,
COO by the Northern Pacific Company,
OcCasiOned q sensational break in the
prices OF these two stocks; and as this
event was accompanied by a rise almost
as extreme in the price Of the St Paul
common shares the general market was
thrown into more or less disorder.
Business conditions throughout the
country, of course, continued to maintain
their splendid progress. Various railroad
companies, particularly those occupying
a subordinate position in the great rail-
way organizations, raised their rates OF
dividend and in some cases increased
their stock capitalization. The improve
ment in financial affairs in Europe went
on uninterrupted, the Bank of England
exhibiting a proportion Of reserve to
liabilities in it's statement in the middle
Of the week that was very high for the
season of the year. The strong condition
OF the bank has. indeed, led to an i'm
preston in certain speculative quarters
here that exports OF gold from England
for our benefit may be again arranged in
the near future
No Disposition TO Criticize Shaw.
While the situation is such, apparently,
that this country can take gold from
England if it wishes TO. such a policy
would manifestly react unfavorably upon
us in many ways. The whole course of
international relations at the moment is
so delicate and involved that any mans
prophecy is worth very little as to how
soon or in what amount gold Will be
sent either from England TO the United
States or from the United States to Eng
land
There is no disposition here TO criticise
the so-cailed relief measures recently put
into force by Secretary Shaw. although
occasion for criticism might easily be
found, if il was wished TO do so, in the
act of the Secretary in anticipating with
out any rebate whatever the payment Of
interest money on the government debt.
II is very doubtful if any warrant of law
can be discovered for such a course, but
the people of the country have become so
accustomed TO the strainings of law and
the findings OF new law by the present
Secretary Of the Treasury. and have also,
as it must be admitted, found these poll
CITES so grateful in various emergencies.
that they are not disposed TO be fault
finding on the present occasion.
Not Enough to Transact business.
We are confronted with the fact that
great as has been the increase of the
money supply in recent years, not only
through the production Of gold here and
in other countries, but through the in
crease in the volume Of our national bank
notes. it is still inadequate to meet the
stupendous demands of the business of
the land There is not a railroad system
in the country that would not like to
parallel. if it could. the example OF the
Great Northern and Northern Pacific
stock issues, which took the center of the
stage in Wall street attention during the
week
Definite reasons as to the cause of the
selling movement in these two stocks
when the news of their stock issue be-
came public. or practically public, are
stu not at hand Spectators for the de-
cline, Of course, endeavOred to make out
that it was because people were becoming
frightened over the extent of the de-
nands for new capital being made by the
railway companies.
No one possessing any familiarity with
the business situation OF the country al
present would be disposed to doubt for
moment Mr.. Hills declaration the other
day that the country is in need of at
least 10000 new miles of railroad, or the
statements of other authorities equally
well informed as TO the vast amount OF
new railway terminals ana the ike that
ought TO be provided for
The trouble is that the same thing ap-