The sun., 1906-02-05
THE FINANCIAL SITUATION.

The declining movement in the STOCK
market. whose incipiency was really noticed
fortnight ago, gathered such headway
in tho fore part of last week as to result in
fairly Sensational break in prices of securl-
ties The largest and quickest decline took
place in values that has occurred at any
time since last summer, the active stocks
falling from eight to twelve points in most
instances, and in one notable case twenty
nine points. This was followed by rally
ing movement fully as vigorous IA the
previous fall, and on Saturday by further
signs of weakness. Speculative sentiment
at the end Of the week was naturally under
the circumstances more or less confused
The prevailing feeling appeared to he that
the break In prices had been mostly the
result of a successful drive at the market
engineered by three or four great specu-
lat ors who, having closed out the whole or
the greater portion of their own commit
ments for the rise and discovered that the
market was in state that Wall street calls
stale, were enabled to bring about
smash in values and to buy back, pre-
sumably a considerable quantity OF stocks
that they had parted with. Yet II was
obvious that the market instead OF exhibit
ing q continuously forward impulse, as
formerly, was backing and filling irregu-
larly II was admitted that there had been
a great deal of genuine liquidation, not
merely by speculate ors but by solid invest
ment interests; that stocks as rule were
lodged in weaker hands than they were
at the close Of last year. and that mar
ket in which such violent up and down
movements 50 quickly occurred could not
be said to present the safest imaginable
field for speculation. pretty emphatic
demonstration had certainly been made
of the ease with which prices could decline
from their present very high figures. AL
most before understanding of the fact had
been really gra sped by the great ma jority
of those interested prices OF some Of the
most active and prominent stocks were
down $40 a share: and there were srecua-
tors for the rise last week who in two or
three DAYS time lost all the profits that
they had made for months previously All
this gives a pretty broad hint that the
market has come to have two sides and
that any speculation for the rise in 1t
should be entered into with caution. The
advice given by all conservative Wall
Street houses at the moment is that II
stocks should be bought at all they should
be bought upon re"essions and sold upon
fair advances and that if there is one thing
that is more clearly "contraindiCated' than
anything else it is pyramiding purcha ses.
There were few If any actual develop
ments during the week worthy Of comment,
and, indeed, the curious fact about the
market since last fall has been that the
in, n
distinctly inspiriting events. as usually
adjudged by Stock Exchange standards,
but to simple confidence in the general
prosperity of the country, accompanied by
m nystery stories Of various sorts that have
not up to the present time materiaized.
With the exception OF an advance in
the Amalgamatnd C)pper's dividend rate,
and rights granted in few instances to
company shareholders in the shape Of
subscription privileges to new stock issues.
there have been few actual cash reasons
aft forded for buying stocks; and we are still
confronted with the fact that even after
the recent fall in rates for the use OF money
the cost of carrying the better class Of
stocks on margin speculation in Wall Street
is much greater than the interest paid on
these stocks themselves. The two matters
that have figured most in speculative i'm
agnation Of late have been the rumored
deals fayorahly affecting the Amalgamated
Conner and Great Northern-N orthern Paci-
fic-Union Pacific group of properties. and
It is still commonly thought that until these
matters have been arranged the general
market will hold strong. But the probabil-
itv lust now certainly seems to be that the
Union Pacific directors will not do any
more at their forthcoming dividend meet
ing than place their company's common
81 ock on n per cent, basis. and the current
price of Iniou Pacific common stock as that
of mere 0 per cent dividend payer Is
rather high. II is said, and said truly that
the Union Pacific could make a much more
liberal distribution If it chose on account
of its vast equities in its Great Northern
and Northern Pacific holdings But here
again the curiosity Of conservative people
is becoming just a little acute as to the
character and IN narket value of all these
much discussed equities. Are there, in
deed. such hidden treasures contained in
them as to justify price Of s4oo share,
or even more, for Great Northern preferred
stock, as is so confidently predicted? What
ever their value, the Union Pacific people,
who are commonly supposed TO know
good thing when they SEQ it as quickly n
other people, seem to he parting with
their Great Northern preferred stock rathe
rapidly. SO, too, the great speculation in
the Amalgamated Copper, United Copper
and American Smelling and Refining group
of securities appears to be based on the
idea that there can be successfully ar
ranged at some time in the near future a
great merger of all these properties sim
liar in a wav to that which was accom-
plished in the formation of the ANA ga
mated Copper Company itself, and that the
public can be relied upon to buy at high
prices the securities of the new combina-
ton thus called into existence. Yet. after
all, might not assurance on this point he
greater: Reviewing the stock market as
q whole it seems to thos, wlo look at il
from n point of view near and yet apart
as being one whose future course is much
more than is usually the case a matter of
pure guesswork, 1t is a market that
appears to be within wide range of prices
almost wholly within control of certain
very powerful and very daring professional
speculative interests, 30 that opinions as 10
the direction which values will take are
.t.-,.n 81 tnfI I.a. l,,