The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-07-09
THE FINANCIAL SITUATION.

more h q month back has been, Oh course,
that Of o steady and continued depression
In prices. The fall carried quotations Of
The leading stocks to o point nearly as low
as that touched In the decline following
the San Francisco earthquake. Quotations
Of the leading industrial stocks were In fact
lower at one time last week than they were
In the hall panicky days OF early May.
while prices of many OF the standard rail-
way shares made new low records for the
Throughout tho last week, however,
the general undertone was unquestionably
hrmer than 1t recently has been. There
was q cessation Of Nquidahng pressure and
tho market hardened. According to all
Trustworthy accounts a large short interest
has been built up In the market that may
very well find itself In an exposed position.
The most curious fact relating to hem market
seems to be really that while stocks have
been falling the financial news, though OF
mixed character, has been on the whole
favorable TO values. There have at least
been no sensational developments Of ad-
verso bearing. AL the news from the
crops In the last month has been distinctly
m ouraging. II time money rates have
held firmly, call money has been continually
quoted at low figures, save for q shghb
furry, as was expected, around the first
Of the month. For several weeks 1t was
evident that tho session Of Congress was
near It's close; and this adjournment 10 in
variably and rightly looked upon as q help
full circumstance 30 far &C the market is
concerned. The only exception to q con-
tinuous pilipg up Of increases In railway
earnings was that afforded by the anthra-
cite roads; whose statements necessarily
reflected the losses caused by the suspen-
sion Of mining operations In the spring.
But these deductions obviously referred
to Q trouble whose influence had long since
passed. Business everywhere In the coun-
try has gone on advancing with not the
smallest signs of lessening activity in any
branch Of trade or industry. The local
banks and the leading Wall Street COM
mission houses all report the speculative
situation as in strong shape, nor is teere
any thought that there is anything over
hanging the market. Why then have
prices Of stocks declined?
They fell, II seems. so far as a direct cause
Ia concerned, by reason Of the fact that the
pools and large professional speculators
who bid up prices with such violence after
the first shock OF the great calamity on the
Pacific Coast had spent Its force discovered
that no one was buying stocks except them
selves, and that they were left without a
market when they desired TO take profits
on their ventures; and that these buyers
were thus left without a market appears
to be due to something resembling q gen.
eral impairment OF confidence in the sta
bility Of quoted values that spread over
the entire financial community. For some
reason, whose true nature is perhaps more
q subject for psychological study than
anything else, that great mass Of individuals
known as the public and which when Justly
described comprises the great banking and
capitalist interests no less than the small
habitual Spectators, began all at once to
turn its attention to the ~unfavorable rather
than the favorable elements In existing
financial concerns. These elements had
long been present and had by no means
been concealed from general observation;
vet their influence on the stock market
had been, apparently. only academic.
Suddenly they began to impress them
selves upon peoples minds SO that Wall
Street became involved in a n atmosphere
II not Of pessimism, yet still Of caution.
suspicion and hostile criticism. 1t was I'M
questioned that a certain coterie Of very
rich men in the country possessing enor-
NOUS influence in financial and stock market
matters were disguised and resentful at
tho course Of the national Administration
concerning their business enterprises and
themselves personally, SO that it was at least
improbable that they we're buyers Of stocks
as the market declined, and not absolutely
impossible that the fall in prices might be
due to their own selling. Beyond all this
there was manifest alarm on the part OF
general business interests over what was
held to be an undue interference with bust
ness: and indeed q most harmful and un-
just meddling with delicate concerns Of
this nature, by people in Washington.
It was feared that the damage to our
foreign trade owing to the attack upon
tho Chicago packing houses might be-
como a financial factor Of vast importance.
The feeling prevailed that much as re-
forms might be necessary in various direc-
tions, and however desirable IL was to
stop certain abuses in railway manage
msnt and in the conduct Of many other
corporations, an incessant pecking and
clawing at one business interest after an
other in the country by n Federal de-
partment after another could have but
one result from q Wall Street point of view.
There Is an observation concerning this
entire subject which It seems natural
to make at this time and which might as
we'll be made now as on any other occasion,
The development Of business in this coun-
try and the methods by which the great
prosperity Of the country has been brought
about have been along certain well under
stood lines, and IL it is proposed in a trioe
to blot out these lines by law and to sub.
stitute others In their place it a hardly
be anticipated that such a disruption will
remain unaccompanied with friction and
trouble. It may be said bro ably Of this
development Of business hat it has been
90 wrought as to give to our business men
rreat-freedom and choice Of action. There
has been no attempt heretofore on the
part OF the Gov eminent to define the chan.
nels OF business activity and to limit a proper
| choice Of action on the part Of business
men, and il there is to be a defining and
| limiting Of this kind in a socialisttc
In essence, however 1t may be described
the business men OF the country must
naturally be alarmed. The central idea
here can perhaps be best reached through
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