The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-12-31
TEE FINANCIAL SITUATION.


been running with greater or less violence
practically ever since the beginning Of
the month; and at one time on Wednesday
prices OF stocks on the average were lower
h they had been at any time hitherto
during the entire year. After this there was
a recovery in values, based partially up on
q clearly oversold condition OF the market
and partially upon an improvement in pre-
vailing conditions. There were indications
that the forced selling OF the Northern
Pacific and Great Northern preferred
shares. which has been the dominant feature
OF the market lately. was completed, and
IL was commonly understood that two or
three weak places in the speculative aitu-
alton had been strengthened. The decline
in these stocks, and indeed in the market
as a whole, had certainly gone far enough
TO warrant an upward reaction, at least,
in prices OF something more than mere
momentary importance. From the begin
ming OF the b~reak-which was about the
m when the large new capital issues Of
the Great Northern preferred and Northern
Pacific stocks were announced, this being
preceded by the publication OF the fnan-
cial plan OF the Atchison and followed
by that Of the Chicago, Milwaukee and st.
Paul company-the Great Northern pre-
ferred shares had fallen 10 points, taking
into calculation, Of course, current valua-
tons for the Great Northern ore certih-
Gates; and there had been q decline Of 45H
points In Northern Pacific, $50 In Reading,
II in Union Pacific and FROM 10 to 20 points
generally in other prominent stocks. Fur
thermore, 1t began to seem likely that there
was to be no extraordinary monetary stress
around the end OF the year. Call money
held during the week at a relatively low
level, and all the probabilities were that
whatever furry in money rates there was
around january I would be very nor tlived.
The stringency in time money was not
abated, and this led naturally to varying
views az to the character Of the monetary
situation in the general future as distin-
guished from that inSthe days or weeks
Immediately at hand. There began to be
noticeable a slight. even II a very slight,
return Of money from the interior OF the
country. and the hope quickened that this
sending back Of funds, so long delayed,
would surely gather force as q stock market
factor early in January. Sterling exchange,
too, was persistently weak, falling to a point
that would a " made gold imports under
ordinary circumstances almost inevitable.
Yet our bankers persistently refused to take
gold from Europe-that is to say, Of course,
from mountaineering or believing that
this action would result in a disturbance
in the London market n would cause
greater harm than good here. This is q
phase of the situation that il the subject OF
rather deep study just now in high financial
quarters. Coupled with the known volume
OF our exports n with the meagre balance
Of actual money in bank reserves in Eng
land against bank deposits, it suggests
queries that cannot be readily or carelessly
answered. There were really no very
specific developments OF note last week
from a financial point Of view. The threat
ened strike Of ysrdmen at the local railroad
terminals was averted. as everybody be-
lieved It would be, and the strike OF fire.
men on the Southern Pacific lines did not
appear to amount to much. There were
various occurrences pointing to the i'm
mense and substantial strength OF the
market for copper metal and Of the current
and seemingly assured future prosperity
Of the iron and steel business. The failure
at the close Of the week preceding of a
Stock Exchange house. that il it was not
large yet could hardly be said to b. small,
no doubt affected the security market
somewhat in the early days Of the week, !
since IL inspired a call for margins from
customers on the part OF commission houses
in many cases was not responded to.
The confusion over the adjustment Of the
rights Of stockholders TO subscribe to the
Chicago, Milwaukee and St. Paul Railroad
new issue Of common and pre-
ferred stock was not perhaps a matter of
market Importance, except as It intensified
fha frr1ta tom nOuOpnnpIv falt In Tho Ana prtol |
district over the bungling manner In which
the issue Of stock was made.
During the year that to-day reaches It's
close the stock market has been on the
whole a feverish and uncertain affair, and
while its results have not been displeasing
to investors they nave been such as to make
the profits Of professional spectators small.
Indeed there is little doubt thai the great
majority of habitual traders in the stock
market have, taking the year as an entirety,
lost money. All these operators" say that
the market has been one that has beer very
hard for them to read. Although trans
actions in it have been in large volume, the
has been neither continuously weak
nor strong for any long period; fluctuations
in it ave been violent and spasmodic, often
without any apparent reason, and it's
OONA q OCCh ~ w hACkuAaA ALI
variable that those who have attempted to
follow it's movements in a speculative way
found the task one that severely taxed
their powers OF judgment. The character
lstic Of the MARKET at the end Of the year pre-
ceding was, as all will remember, the enthus-
Iastio advances made in il. although as high
rates for the use Of call money were paid
for the purpose OF carrying on this ~specula-
ton as had been seen at any time in the
generation. The strength in the mar
ket had been continued for several months
previously. despite a stringent money
such stringency, Of course, being
no means as great as that which has been
prevailing in the last half OF the present
owing TO the fact that in 1906. as COM
pared with 1905. time money could be had
IN fairly easy terms. From August to
December, 1905, however. the market was
up with the hope that whatever
money difficulties there were were of heeting
character, and that early in the next year
here would be such an unloosening OF the
both Of bankers and Of the peo-
de as would make money very easy in Wall
street. In the first week OF Januarv InO6