The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-04-29
GOSSIP or VAIL STREET.

tne Hf6C great BnOck Is IOllOWed by a num-
Der of others Of varying intensity. This
has occurred In California, and something OF
the same kind is occurring In the stock mar
ket. Wall Streets great shock came on
friday and a minor seismic disturbance
occurred yesterday. The more recent tremor
inflicted the greatest damage on some OF
the price structures which had passed through
the first visitation without suffering very
severely, and wkGS the effect was not 80
sharply felt at any particular point. as In
Great Northern. Northern Pacific and Colo
RADIO Fuel on the first day, 1t was widespread.
and for this reason produced very uneasy
feelings,
A strange distortion OF vision seemed to
trouble many Of the traders. The pyramids
OF stock which a week or two ago they looked
upon as wonderfully solid structures OF
financial architecture suddenly became TO
their mind's eye inverted and very insecurely
balanced on their apexes. They thought
that the unstable str were momen-
tarily In danger Of topping over, md as II
believing that the only safety lay n getting
them dow as quickly as possible they set
themselves asslduously to the task Of dwelling
prices. In many cases II was founo, how
ever, that the stability was much greater
than II appeared to be, and by the tine the
market closed some Of those who showed
the greatest nervousness early In the day
wondered II there was. after all, any great
cause for alarm.
The industrial stocks were as a group
weaker than the railroads. The selling Of
those was on the theory that a serious con-
traction In general business was at hand
on account of the high rates for money.
American Smelling and Refining was the
weakest member Of the group. but the rail-
road equipment shares also suffered rather
severely. In regard to the equipment stocks,
1t was argued that as in a money market
such as Wall Street has seen recently the
railroads would be unable to obtain on
favorable terms the funds for purchase Of new
equipment. they might. therefore, be COM
PEELED to defer for the present the making Of
purchases contemplated. In times when
money Is easy railroads. il general business
conditions warrant such q change. retire
cars and locomotives Of obsolete types and
replace them by others Of larger capacity.
and thereby increase their ability to handle
large trainloads without a corresponding in
crease In the amount OF dead weight hauled.
Such changes. not being absolutely neces-
sary, are among the first OF contemplated
Improvements to be abandoned when adj
verse conditions in the money market inter-
fere.
The weakness in Smelters was not entirely
susceptible of the same explanation. OG1oials
Of the company have always commended that
their business ls not affected by depression in
general trade conditions. Their principal
business IL to smelt ores for which a fixed
rate is clarged in good and bad years alike.
Most Of the business is done under contracts
many Of which run fifteen years or more.
The probability Is that the decline in
the stock had no reference whatever
to the company's business or its 1nan-
cial condition. 1t was entirely the re.
suit OF the situation in the market itself. 1t
has long been questioned whether the stock
was not held at too high a level. Shelters
was indeed one of the mysteries Of the mar
ket. The company never furnished sufficient
information about its Ondition TO enable the
outsider to form an intelligent estimate OF
the value Of the stock. The insiders knew
and showed their faith in it by moving the price
up with a persistency which astonished the
Street. Time and again on the phenomenal
rise last year people who thought the manipula-
ton for the rise was overdone attack ed
the stock with short sales, but In almost every
case they failed to cause any considerable
reaction. The continued successes OF the
bull pool at length attracted the favorable
notice Of large speculative operators. who
made the stock one Of their particular favor
ties. But the public held aloof. with the re-
suit that the stock remained concentrated
In the hands OF comparatively few. This
was an element OF strength when sentiment
in the main was bullAh but became some
thing entirely different when some OF the
speculative holders were obliged to let go.
1t Ia interesting to recall some OF the pre-
dictions made about Shelters on the rise of
about 90 polnts last year, when the stock more
than doubled its price in twelve months.
At the start par was predicted. and when
that made good the predicted level was raised
by jumps of rs points until 1t reached 200.
The price finally crossed 40 In December.
fulfilling all these predictions. with the eI-
ception Of the last two. At the beginning OF
the year the stock was on a S per cent, dividend
basis, but predictions Of an increase to 7 per
cent. were very confident up TO the time
when this rate was adopted In the fall. The
talk started about a raise to 10 per cent,
which, Of course. has not yet been fulfilled.
The company did a great deal In the way
OF expansion. securing control OF the Federal
Mining and Smelling and Of a lumber Of indie
pendent mine s and smelters. as we'll as OF
Utah Consolidated, and was reported TO be
In negotiation for other properties. including
a number in the Bingham Camp in Utah.
The policy Of expansion was SO aggressive
that many were inclined to repose faith In
the predictions that In time the company
would control the smelling business of the
world. All these reports fired the enthusiasm
Of daring spectators and obtained their
cooperation In a movement which many
conservative interests regarded as rather
overdone. The recent decline was perhaps
not unnatural under the circumstances.
Again the story about heavy buying by
London was accepted by many traders,
although 1t had not even the semblanoe of
| truth. As a matter of fact, London sent selling
orders at the opening and took no interest
after that. No business TO speak Of was done
on the curb after the close OF the exchange in
the English capital, and what was mistaken
| for London buying in our market was only
the execution Of orders placed with houses
having foreign connections for the very pur-
pose OF creating the impression that Europe
had turned buyer.
Few persons looked for a favorable bank
statement. Those who did were bitterly disap-
pointed. Perhaps not a dozen brokers or
traders expected such a bad showing as the
figures actually made. The immediate re-
suit was a small covering movement by
traders who had profits on the short side and
argued that the best time to buy was when
the worst became known. The rally, how