The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-05-07
rHE FINANCIAL SITUATION.

80 N'~ 'N@
Wall Street was exclusively centred upon
the San Francisco DISASTER and every line
Of news from California was read by people
In the financial district with absorbing
interest. as affording practically the only
clue worth considering TO the Immediate
movement Of values, so last week (or during
the greater portion Of ~ news Of any kind was
absolutely UNDECIDED and the gaze Of speou-
lators rested only upon tho internal move
ment Of the market itself-the progress
Of the great liquidation In the forepart Of
the period and the retreat Of the short
interest at the close. All the talk and
gossip focused upon the question whether
forced sales OF stocks had been completed,
whether this or that former plunger on
the side Of rising prices had or had not
been sold out by his brokers and the
probable level at which banking and invest
ment support would be attracted to the
market. San Francisco was for the time
being almost forgotten, and 1t was not until at
the very close Of the week that an external
market influence worthy OF consideration
doomed up in the Garfield report concerning
the Standard Oil Company and the dealings
Of that great corporation with the railroads.
It Is, Of course, very clear that for the notable
fall in values during the last two weeks the
work OF spectators for the decline was
primarily responsible. There dawned slow
Iy upon the stock market after the earth
quake and fire in San Francisco the realiza-
ton that the upward movement in values
this spring. that had upon the best OF grounds
been planned by substantial financial in
terests and which would have occurred
anyway with or without planning on any
body's part, was made difficult OF accom-
plishment, even If 1t did not have to be laid
over altogether. 1t was obvious that
although for the moment, owing to the large
imports Of gold from Europe, the money
market presented no serious difficulties
in the way Of an advance in prices, the
event in San Francisco would yet
induce q feeling Of conservatism, not to say
timidity, among investors, and that 1t
brought the threat of possible complications
regarding the money market later on. A
few large spectators made haste to close out
their accounts for the rise and to make
tentative sales of stock for the de-
cline. Seeing that the market was not
disposed to absorb stock in large guam
titles, and that as prices declined further
liquidation Of speculative holdings oc-
CURED rather easily, the spectators for the
fall redoubled the extent and energy of
their efforts, pounding" the market heavi-
est upon the few occasions when there we're
feeble rallies in prices. Tt developed. as 1t
always does at such times, that the amount
stocks carried speculatively and on slen-
der margins in the hands Of a relatively small
number of large operators was much greater
than had been supposed. Many OF these
men had to sell all or the larger portion
their holdings for what price they could
for them; and so the market went on
breaking violently day after day, There
was also a suspicion that the decline did
meet with d~isfavor, at least on the part
certain powerful and prominent capital
Long before the calamity on the Pa
cifc Coast a frequent subject Of comment
in Wall Street was. tho slow but persistent
fall in the price Of Chicago, Milwaukee and
St. Paul common stock. No great quantity
the stock appeared to be pressed for sale.
it was clear that the stock was display
a weakness singularly in contrast with
it's previous strength and hard to explain
in view Of the splendid position in every
way Of the st. Paul company and OF the OK
tent to which tho shares of the company
had passed out Of tho stock market in re-
cent years into investors hands. There
were many who thought that the decline in
st. Paul meant only that the directors OF
the company in vi ew of the admittedly
adverse conditions of the money market
as regarded new stock and bond issues,
we're selling, as they had a right to do, in
the open market on the Stock Exchange
The s25, 900, 900 of new stock authorized by
he company for extern sions and improve
ments. Such a procedure would bar the
stockholders of the company from their
expected rights" upon convertible bond
ISSUES or new stock issued to them at par,
but OH the other hand it would place in the
treasury Of the company a premium run
as high, doubtless, as $40 a share above
par value of the new stock sold. The
large stockholding interests in the COM
panv would, of course, have to lend their
shares for delivery while the new stock
being sold, but they had done this be-
fore and there was no reason why they
might not do it again. Again, it was mani
fest that in many ways affairs were not
processing altogether to the liking Of the
fnanciers who were dominant in the st.
Paul management and whose interests and
power in the general stock market were
great. AS a result of legislation
Albany the great Consolidated Gas
Company in this city, in which these
capitalists we're largely interested, had
been compelled to cut its dividend in
two. Might it not be that these and other
men in the same financial class felt
hat it was time to give to the country
object lesson" emphasizing their WI
at least, concerning the effect upon
corporate enterprises throughout the