New-York tribune., 1906-04-08
The Financial World.


per cent on Thursday and Friday. And -.
conditions were followed by a bank state
revealing a decrease In the surplus reserve
preaching $8OOO.OOO. This situation was -
or less directly due to a large loss OF cash -
New York to the interior and TO a fairIv -,
increase in loans. Under ordinary cIrcumot,-
developments OF this kind would be ee.,~
bear weapons. but In the present situation ~
have been powerIess to depress values
planatiOn OF this Is found in the rernart-.,
strong character OF present security Owner
Stocks not being carried to any extenf 4
commission houses on margin. They are los,,.
in the hands OF investors as never before Eno1-
and there are great holdings for purposes OF -
troll or merger which are carried by the -
powerful financial interests in the country. ~
there is significance in the slight responss 7,
time money. to the nervous condition Of -
money. All through the week time funds eo,rs
be borrowed at per cent OF little highore.
periods extending from sixty days to six mop,--
Undoubtedly present security holdings -,
been fortified by time loans. and the exce--r,
rates now and then appearing for call loansh,v,
not pressed hard upon anybody save thoso h,
lated daily borrowers who always hold OF una
the last moment in the hope OF effecting a a.
ing.
Coincident with high money rates has b,-
continued decline in sterling exchange uahi,-
gold imports profitable. One actual engagemm,
for million dollars from London was made =
Friday Plenty gold win come II On,
money market remains high. It is weI Iuov1
that we possess credit balances abroad Whi,S
are available at our pleasure.
Attention is sharply called TO the defectu a.
the currency system which permits such ante
gyTatiOns- The very day on which moneV II
New York went up TO 80 per cent the Bank ~
England reduced its minimum discount rate 70
31a per cent. There is no important fnanc'-l
centre in the world except New York Whe-.
such manipulation OF the money market Ia -
s1ble 1t ought not to be possible here Is
serenity with which the security market VieV1
the money market is testimony. to intFiu-f5
strength without precedent 1t wholly dispo---
of any notion that price Improvement has bas-
the result of manipulation. If the present ram
of prices were artificial. what a crumbling AVA
there would have been when money became al
normally dear. In best informed banking cir
cleS il is believed that the worst is OverAthst
the natural and seasonal flow OF funds bach
TO New York Will appear. Should il not should
the phenomenal business activity thrOUghout
the country keep money so active as TO with
hold it from Wall Street, then beyond doubt
relief will be found in gold imports.
A canvass Of important banking interests r.
veals no pressing anxiety over the money situa-
ton 1t is indeed. the popular disposition. even
in the most conservative quarters. to character
ize the weeks squeeze as a "spasm." It is. a
course. the comment Of Wall Streets cynics that
this 'spasm' has been the direct result Of man
ipulation by the bankers themselves. working to-
gether to force abnormal rates-not so much to
grab relatively petty profits through the few
days of call money stringency as TO persuade
Stock Exchange brokers to take larger lines
Of time loans at the current rate, ruling sub
Stantiaily above where the time average has
been during the last two or three years BE
this theOrizing il may, IL can be counted
upon as trustworthy that foremost bankers
do not expect any long continuation Of either
call or time rates at excessive figures. And such
judgment is the best judgment that either spec
UlGtOr or investor can follow.
What shows with forceful clearness through
all the noisy murkiness OF current manipuIatol
for the decline is that the investors Of the coun-
try are careless of any antics that stockjobbeTy
chooses to cut. Stocks are not for sale at pIs-
vailing figures; the owners Of stock are not to b
fooled or frightened: investments have been
made with thorough understanding Of value.
The Old times rule which called upon stockhOld-
ers to quake every time a bear pool got hugE
does not work nowadays. Take the situation n
the vanderbilt quarter Cor illustration Investors
holding New York Central now bought it with fuI
notice of the fact that dividends paid through
some years were not earned; but theg
are being earned. and surpluses earned-where-
fore. the face of the buyer is not toward what
was pessimistic in the past, but what has in it
assurance for the future. This same scrutinizing
investor appreciates fully toO what is repre-
sented In the expanding prosperity OF every New
York Central auxiliary-fOr where at one time
Big Four and Nickel Plate and the rest we're
burdensOme. the time now arrives when into the
New York CentraTs treasury from the very same
sources flow tremendous surpluSeS-Big FOur9
dividend, certain of material enlargement soon.
and Nickel Plate common ready to become al-
most as great a dividend contributor,
Throughout the week-indeed, for months past
there has been continually in evidence tle
quiet absorption of all the Vanderbilt Junior
StOckS-mOre particularly the two foregoing. BIG
Four and Nickel Plate. Nickel Plate common
on q normal operating expense basis tearnings
no longer arbitrarily diverted into rebuilding ne
TOad) earns upwards of per cent. Beginning a.
a 4 per cent stock. its market value will natu-
rally approach par, above which Big Four has
ranged per cent dividend payer
OF Big Four itself-Of its early future-it Is the
Judgment of careful observers in the railway ana
banking world (authOrities) that dividend IN
crease Is close at hand. 1t be said. hOwever
that it is not yet officially declared whether ne
increase will be forthwith to g per cent or %
upon = per cent basis for interim. The laet
that the Lake Shores annual report. Just isSuel
shows that within the last year Lake Snolt
bought $SO0O0O0 additional Big Four stoef
(withOut Wall street az anv time suSpectns us
absOrptiOn) can be trusted as indicative Of some
thing far out of the ordinary. And II is not e.
thusiasm to reiterate what last week was
averred IN this review that before long Big -Four
stock will sell at 125 and still be a bargain
In consideration Of spasmodic money market
conditions which would have knocked any Ord-
nary market into uneasiness, if not demOraliza-
tion. the record OF the weeks net quotation
changes makes curious exhibit-an tnspri'ns
one Relatively few standard stocks are actually
down as much a whole point-the list OF al
VanCes is long Pennsylvania. Baltimore ana
Ohio, Lacka wanna, Jersey Central DelaVale
and Hudson and Illinois Central are conspicuous
representatives in this list of gains. This is .
group of Investment stOcks-their market cen