The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1906-12-20
WALL STREET NOTES
Shaw's Visit to New York
Made at 0ppOrtune Time.
POUNDING DOWN IS CONTINUED

hind the Move to Hold Market
Firm - Reading weak, Despite
Prospect of Higher Dividend Basis.
steel Common Holds Up Well.
New York, Dec 1s.-Secretary Shaw's
visit to New York to-day was not made
on routine busiRess connected with the
new custom house" The Secretary came
all the way from washington to make
sure that the money market was suffer
ing from the effects of the withdrawal OF
funds from the regular channels Of busi-
ness at the rate of about Sl.000.00O day
by the Treasury. Mr.. Shaw. wanted 10
get right close TO the situation and study
II at short range. He Is said TO have made
the discovery that there were other tac-
tors in the situation than manipulation
of call money rates. and came TO the con-
clusion that further measures OF relief
would have to be rendered. and rendered
promptly. unless the commercial business
Of the country was 10 be allowed to sur
fer severely
Mr.. Shaw is said to have expressed
great dissatisfaction with the kind Of re-
spouse made by the banks to his last
offer 10 purchase bonds. but. neverthe-
less. il is believed that he is determined
TO make a new offer to purchase larger
amount probably on small different
terms. This time II is likely that there
will be no Emit to the amount which
may be purchased from a single insti-
tuition.
The pounding of the market was most
vigorous just before the arrival of Mr.
Shaw downtown. and the rally set in on
the first limitations that the object les
son had made its impression.
Who has got the stocks?'
The big interests"
The question has been often asked in the
past few weeks. The answer is that
which has been almost invariably given.
/ Is the answer wrong II may be. The
game that is played on the New York
Stock Exchange is a big one. and those
who play it are becoming more accom-
[ pnshed all the time There is a finesse
about the operations of to-day that the
old operators of the days of Daniel Drew
never dreamed Of. In a sense. the public
/ has not been in the market but the
large interests. by making the most of the
ceeded in distributing a much greater vol
ume Of stocks than has popularity been
supposed. Large holdings must be re-
tanned for purposes of control, but it is
possible and even probable that stock not
needed for this purpose has been distrib-
uted on considerable scale. The prCba-
bility is that on severe breaks the big in
/ terests buy back what they think they
can sell on the next rise. but the old the
! DRY that they are permanently committed
/ to the bull side on account Of enormous
holdings of stocks viii not meet with
ready acceptance hereafter
/ When the rate for renewals Of call
loans was fixed at = per cent the word
went around that the continued money
/ stringenCy would cause renewed out
burst Of liquidatiOn-and il did Il is. of
course, entirely probable that there was
la large amount Of short selling. the va
rious predictions of very large declines in
/ important stocks being evidence that some
/ interests were endeavOring to get prices
down. and while some OF the short stock
was afterward covered. 1t remains 10 be
! seen whether there is not enough still un-
( covered to add very materially tc the ex-
tent of the markets recovery on the ad-
vent Of less stringent money conditions.
/ The big Christmas market" that was
predicted about the middle Of the month
/ looks up 10 this time very much like a
/ bear feast The size Of a good many
/ holiday presents may be reduced in con-
! sequence.
/ Rumor had It in the forenoon that two
/ members Of the Standard Oil group who
/ have been active in the market for some
/ time past closed out the last of their
/ specultiye line of long stock when the
/ short interest was squeezed In St Paul
on Monday and had since been knock
/ ing down prices vigorously and with great
profit 70 themselves The story may
4 have been entirely untrue Most Of the
/ streets Information as to the market
position Of the Standard oil interests
/ generally is. but there is no doubt that
/ II caused a good deal of general selling
/ for both acc cunts. the traders taking the
/ view that DIS the money conditions were
/ extremely unfavorable to the mainte-
! nance Of prices, all that was needed was
/ influential leadership on the side of. a
I decline to send quotations down quickly,
/ The only safety the holder of lightly
margined stock could see was in liquida-
ton. and many were the selling orders
/ given which meant the separation OF
small traders from a good part of their
capital
1t looks as If once again the street has
been misinformed as TO the attitude OF
/ Standard Oil interests-or, what amounts
to the same thing. that the information
! came so late as 10 be entirely misleading
/ Those who sold because Standard Oil in
terests had sold We're apparently just in
time to give the latter an opportunity to
get cheap stock.
Before Reading took its long plunge.
the tip was given out that control of the
company had passed into new hands. and
that it made no earthly difference what
action might be taken by directors, as the
stocks position in the market did not de-
pend on the dividend question at all, but
on the good things which time and the
new interests would bring forth ThH
kind of argument was, however, tot<sly
disregarded The traders were in no
humor to listen to anything that was not
bearish. They had made up their minds
that, even if Reading was placed on a
higher dividend basis its price would de-
cline, and proceeded to sell with an entire
disregard of the smallnes of the floating
supply which has made the stock a rather
risky short sale at nearly all times in the
past year or so.
The result was that when the rally set
in, IL found the technical position In Read
ing unusually favorable to bullish opera
TONS and those who in the forenoon had
treated the bullish talk with anything bur
respect began to think that, after all
there might be something in il.
| After the close, announcement wa
made of the declaration of the regular
rate of dividend for the half year