The Washington herald., 1906-12-07
Brokers Wonder Why Shaw
Changed Mind Suddenly,
PUTS CRIMP IN SPECULATION
Prominent Men Believe that Secre-
tary's Plan VIII Aid Business Only
from "a Purely Commercial Point
of View-StOcI<s Decline, Union Pa
cifc Holding Record for Weakness.

spired dispatches received in Wall street
from Washington as late as noon on
Wednesday. had up TO that hour no inten-
ton of afording any relief to the money
market Yet, late in the afternoon. when
the stock exchange had closed for the
day, with vigorous rally the announce
ment was made that the head of the
Treasury Department had decided to an
ticipate all interest falling due on govern
ment bonds between January l and May
l. 1907, inclusive, the effect of which viii
be the release on December - of about
ST.. coo for the use of the business COM
munity.
II Mr.. Shaw, at noon, saw no reason
10 do anything TO relieve the market. as
was reported, it would be interesting TO
know what circumstaHces opened his eyes
few hours later TO a situation the
gravity of which had long been under
stood by everybody else. Wall street
would be greatly Interested in any infor-
nation regarding the standard which the
Treasury has adopted to determine the
point at which business conditions require
'as much as can possibly be spared of
the working balance of S7S,0o9 000." " 1t is
hard 10 reconcile present conditions with
the statement that the money Of the
country belongs TO the people. and Treas
ury operations must be made subordinate
20 the interests of the country
It is all very well 10 say that ''an ounce
Of prevention is better than pound Of
cure" but the time for the prevention Of
stringent money conditions has passed
when rates on call rule well above % per
cent and those on time are In the neigh
borhood of 8 per cent.
Bankers assert that while substantial
relief viii yet be given TO the money
situation, it viii come in a way and at d
time to aid the commercial rather than
speculative interests. II Shaw can do
this. and has a clear plan by which he
hopes to accomplish it, then by all
means let him follow his own course
Certainly what he has done-or failed TO
do-hds gone some distance toward dis
cOuTaging speculation. but il remains to
be seen whether the commercial activi-
ties of the country have received sUfii-
Cient encouragement to sustain them un-
III further measures are taken
Certain speculative interests which
bought stock on Wednesday on assur-
anccs from some quarter that a scheme
Of Treasury relief would be announced
over night, were free sellers yesterday, as
the action by the Secretary Of the Treas
Ury did not come anywhere near meet
ing their expectations Of what would
be done. They were able TO raise Amer
lean stocks in London, with a view 70
helping prices at the opening here, but
Notwithstanding this they found very
little opportunity Of getting out with
profits. One of the stocks which inter
es;S especially favored was Reading in
which they are expert manipulators, but
even so, it is doubtful If they can have
made much on their operations
Union Pacific was the weakest stock
on the list, its decline disturbing senti-
ment more than anything else that oc-
the continuance Of nigh rates for money
The statement OF earnings for October
was good, but not remarkably so, and
was not factor in the trading one way
or the other but apparently the street
has come 10 the conclusion that the an
nUal report issued in the early part IF
last week put the best possible face on
the companys affairs and left It open
TO question whether the stock was not
selling high enough on the showing.
Canadian Pacific was one Of the strong
est stocks, both in London and here.
largely for the reason that this issue has
escaped the discrimination to which
Yankees have been subjected in the
British financial center. Canadian Pacific
has plenty of friends here and abroad on
account Of the splendid earnings Of the
property. and the prospects Of increased
prosperity in the Dominion as a result of
the mining development within its borders
Another factor is, of course, the influence
of agricultural settlers. which is not only
maintaining a strong demand for the COM
pany's lands, but is constantly adding 10
the shipments Of farm products. which
form the bulk of the roads traffic.
Why Great Northern should have
opened at 250, nobody could understand
for this price, with the value Of the ore
certificates, mean a rise of about 10 points
over night Brokers who held stock for
sale did not lose much time inquiring the
reasons for the rise, but went in with a
rush, trying to get something like the
opening price and Immediately the level of
quotations dropped down to about the
equivalent Of Wednesdays closing The
rights were fairly we'll supported, but the
queer action Of the stock was not reIished.
1t was a marvel how such a transaction
as that first recorded on the ticker could
have been put through rs a moments G
warning would have brought brokers from
all over the room Offering stock several
ffr.. oI1o
the lowest point of the day. and declined
l614 points from the opening level.
If it could by any chance have happened
that the broker who made the first pur-
chase Of Great Northern at 80 really did
1t on market order, he would have some
difficulty in finding an explanation salts
factory to his customer as to why such a
high price was paid.
A prominent house in its market letter a
few days ago made the following contri-
button to the discussion of the prevailing
rates for call money:
THE demand for money is felt by all the
banks and trust companies. and comes
from commercial, mercantile, and fnan
cial enterprises often disconnected with
Wall street
ne principle on which call loans are
made on the floor of the STOCK exchange
IS not a very judicious one, but it is hard
to suggest an adequate remedy. As the
matter now stands a timld and excited
broker with Indifferent credit, and per
haps equally Indifferent collateral, further
bids the rate for call money. forcing an
unfair situation on his associates with
better standing.
There is no uniformity in the custom
OF the banks in lending their money.
and many brokers cannot tell until /
O'Clock whether their loans are going