Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-03-03
BULLS AND BEARS

Special Dispatch to The Star.
NEW YORK. March $50 far as can
be learned no pressure was brought to
bear from Wall street. financial or specula-
tive interests to have the Secretary Of the
Treasury do what he has done. In fact, It
II not going too tar to say that bankers.
at least, did not consider the present money
market emergency and the outlook for the
next few months such as to warrant treas
TRY action at this time. Although the
City Bank. in its March circular, asserts
that the frmness of the money market II
owing to the workings OF the national
banking law and to treasury operations, e
has been the City Banks view that the
was not time OF sufficient stress to bring
the government surplus into play. hut that
this reserve of aid should properly be with
held until the fall crop movement. How
ever, the terms on which Secretary Shaw
that he has an eye to conserving business
and financial interests in the fall.
Almost any Wall street tyro would guess
that the announcement of the treasury de-
posts in banks would have stimulating
effect on confidence In business and other
circles. The amount OF the deposits is not
large, but 1t Is something. and the indica-
ton OF the treasury attitude Is much more.
The deposits do not expand the currency ar
ihcially as Is wrongly stated. They do
return to the money market sums that
nave been artifcially withdrawn, and one
might perhaps be. justified in concluding.
from the explanation given by Mr.. Shaw
for the course he is pursuing that he is
prepared to make further deposits IL the
treasury continues to absorb the circulate
Ing medium Of the country as 1t has been
doing.
One consequence of Secretary Shaw's
action Is to give point to the warnings ut
tered by Mr.. Schiff and other bankers In
the last few months of the dangers attend
ant upon our currency system, and prob
ably the banking community would be
pleased IL there should be an eruption in
Congress over this action by the Treasury
department., for the way might then be
opened for legislation that would correct
some OF the independent treasury system.
Both President Roosevelt and Secretary
Shaw have urged such legislation.
There does not seem to be any reason
for criticising Secretary Shaw's action on
the ground that money market relief
should come properly and only through
stock market liquidation. In the first place,
1T should be obvious to the most bitter
Halter of Wall street that speculation in
securities has been only a contributing
factor to the tightness of the money mar
ket far more important factors being the
tremendous demands of an Unprecedented
activity IN business ana industry ana the
locking up of cash in government Golfers
in this country, and the great strain of the
Russo-Japanese war, the revolutionary
conditions in Russia and a generally dis
turbed political outlook abroad. In the
second place. Wall street has alreary done
it's share and probably more than it's
share, toward relieving the money market
through liquidation Of securities.
There has been very large volume Of
stocks sold since the turn Of the year. and
substantial decline in prices has resulted.
1t Is not too much to say that three out
of every four stock exchange houses. If
not seven out of eight. have held a very
conservative, if not a bearish, attitude
toward the stock market since Decersbr
l last. solely on account Of monetary q IN
ditions.
They have certainly not encouraged
speculation. That the decline In prices has
not been more extensive is owing almost
solely to the fact that stocks have been
passing into the hands of men and interests
well able to care for them, and who have
a great deal of confidence in the strength
and soundness of fundamental conditions.
~
One inference drawn in Wall street from
Secretary Shaws announcement which is
distinctly worth mentioning is that it must
indicate that he considers the money stua-
ton decidedly more serious than in Decem-
Der, when the stock market was paying
up to 100 per cent and more for call loan
accommodation and per cent for thirty
day funds. 1t Is also pointed out that SO
long the treasury held aloof the money
market rates were sufficient-to attract large
supplies of credit from Europe and even
to make gold imports look an imminent
possibility. It is taken for granted now
that the effect of the treasury's action will
be to cause a sufficient relaxation in the
money market to put gold imports out of
the question, although interest rates may
not lower sufficiently to keep a considerable
amount of foreign credit from being ex-
tended here.
A banking view held by many is: "Secre-
tary Shaw need not have done 1t. The
money market was working gradually but
surely into a more comfortable position.
The treasurys action may have been
over-stimulating effect and undo the good
baf betne accommodated