New-York tribune., 1906-07-22
The Financial World.

may be added third. Of soquentiaI co-erasn. 80
have 20 do with this turn to the good one
other reflects money market cOnditIous-oss.
both has gOne hysteFia-into both has co.as a..
appreciation Oe prosperity.
Corn, Enthusiastically every natisnaI e-r-z q.
toward the close OF July showing not OnIz 49,
factory. but almost unDrecedentedly. a a -
umc and as 20 quality too Our whole ag5l-tSs
uFal Western country IS assured OF money v5s-7
unparalleled Every one Of the myriad -
icisms and cFOaks is dsprOVed; the lrS--s-
farmer in 1906 commands DFOdts never lisfses-
approached. And as 70 money call fund ~.
suddenly abundant. accommodation on tirle-S~S
money for the rest Of the year being Tss1-ss
Obtainablo well within the natural, legal ilfe.s.
rate.
Much is heard. wheFefrOm forIorn pes-f--,..,
are still intFUding their shTieks. OF distrusss-
abroad, more especially as to Russia IN re-~is
anarchy threatening, OF French investors 49,
less the Paris BOuTSe IN panic. This ro-s -
announcement would be grOtesque were 81 ~
criminal. Russia Is having hard times. RI.sSi'
do not hold prime position in their St Pstsr7
burg investments. But America isn't bUrlcrsr
with the scrip that comes out OF Russia; UnifeS
States credit Is not at risk however remOtslv
through any OF the curious entanglementa viz
which the Car may be seized-Cnited State
credff 9r1plv attested by the transcendenf -
ord Of per cent national bond far overSu5-
scribed at points on points above paF-goveTr-
ment credit in all the worlds history Una1-
preached.
The situation. speculatively. and on most en-
in this review last week 0eciared-Jha1 Win.
Wall Street IS always doing curious things az
ways promoting what is anomalous IL would
seem East belief that security values can now f-
made to droOp-the intrinsic vaIue OF evo~
security quoted upon the New York Stock L.
change having actual origin In conditions which
the whole country over spell prosperity Meas
ured by any standard acceptable to eOmma1
sense a Wall Street depression status IS unwaF-
Eanted. tnexplicable-save only in the theory
that powerful manlpulatofS cOInDlne 70 1a1T-
cate an uneasineSs cOntemDtuous altogether (f5r
a time) Of basic facts
And this weeks market record shows thai
there was justification in the forecast that n
due season natural. healthful revUlsion must
shOw-the Wall Street stock list (rneasured bV
good sense standards) become a eatalogue q
bargains.
IL Is a truism that bear news has no infueu1s
in a bull market. that bull news is without e1eot
in a bear market Illustrating this vas the mar
ket reception on Thursday OF The failure by
either Union Pacific or AInalgamated Copper %
make any change in dividend policy. Anticpa-
tiOn OF increase was common and had this been
essentially q bear market. the failure OF these
two important companies 20 fulfil expectations
would have been worth a swift decline, yet both
Union Pacific and Amalgamated closed yestet-
day at substantial gains from Thursdays prices.
Herein is evidence that We have no settled bear
market. And further evidence is Afforded By tha
failure Of New York to become disturbed over
the Russian situation. which IS 6Xertiug a de-
pressing influence on all the European e--
changes. OF course, 10 must be realized that
Russian upheaval would be q very serious event
and would no doubt exert some sympathetic IN
flUence In our market. but the calmness with
which this possibility is viewed here reveals ab-
sOlute confidence in our investment and banking
circles.
Nor is this bull confidence without cause
The prosperity OF the United States q simply
phenomenal ana bids tatr TO become even greater
during the ensuing year. though last year was
a banner one. For a long time Wall Street can
refuse 70 reeognize facts 1t has seen ut IN its
I own whimsical way to base transactions upon
the theory that prices for securities were toO
high anyhow; and the professional element has
committed itself to the snort side on an en0r-
nous scale. Prediction after prediction from the
bear camp has failed TO meet fuiflment. Going
hack to the time OF the RussO-Japauese war.
and coming clear down to the San Francisco
earthquake, not single event having within it
the possibility OF distress has been OF sufiicielt
force to stem, much less to turn the tide of
American expansion. There have been some
haltS and hindFanceS. but all have been swept
aside by the irresistible flow of a development
3ar more potent than ever known before in the
history OF the world
Now appear signs that Wall Street is begin
ming 70 experience a Change of heart Large
operators with important fOllOWingS have for
the last few days been large open buyers. This.
OF course, may mean nothing more than tenn
porary market operation; yet It may mean
reversal of market form sufficient to attract
interest and wake the market up.
on the basis Of just cold arithmetic long
line or securities be cited, where asset value.
earning value. or dtvidenG yield, are not ads-
Guately recognized IN current quotations. Il-
eVitably recognition must come in obedience to
both natural and economic law.
While attractive properties are as stated cas-
lly Teeogn1zable-knOwn readily by every fair
observer of the market-equallv ready is recog-
milton OF contrary list wherein danger elements
luFk In this weeks market course some OF these
danger stocks have figured conspieuously have
scored substantial advances. Reading has risen
haIr q dozen points; Tennessee Coal is Up even
more. Taking these two stocks for example
both tremendously higher than warranted By
any earnings record they have been able 70
present-there is sufficient reason for investors
to show halting disposition. Fortunately. how
ever, they are not ntative-there are COM
paFatively few stocks in which rule influences
such as recklessly have lifted these two ex-
ampleS so far beyond the safety pointer It -
well within bounds TO say that there are not
many stocks so situated that they have 70 be
supported by resort TO the speculative devices OF
desperation Banks lending anything like Sl9V
per snare upon tennessee Coal and iron must la
hypnOtized-fOr the same banks managers would
resent any borrowers suggestion that they
should permit themselves 10 lend upon New
York real estate three or four times fair aq-
pra1saL And 1t does not matter how buoyant
market can be. how generally sunshiny fnancial
conditions may show, there are bound always
to be danger spots in any market wherein over
loaded pools are able TO fabTicate quotations y
seduce hanks into special and extravasant
credits.
With examples like Reading and Tennessaa
Coal scarce, there are cOuIrastiug examples
abundant OF properties wherein value expansion
shows tremendously. Erie Railway securities
eXeHplify this graphically. Frederick D. Under
wood has been president OF the Erie for nsa
years Wherefore, take these five years IN COM
DarisOn with the i've years preceding. and nots
how wonderful the revolution which the pero4
Of progressiveness records
Before Underwood. Gross ea-nirEz. Net sarainsss
1S95 5>.....-..-....--.....-.-.. SSl.495e3l SSlass
tosS. '...-.......---.-.---,.-- SS.ti1So0 49,
ACKNOWLEDGEMENTS S3lo@ l1t sFs-.-
1sY is IS Ss rs rs S S, 1
Under Underwood: