The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1906-10-25
STEEL UNDER ATTACK
Bear Clique Only Partly Sue
ceSSful in Their Raid.
GOLD FLOWING INTO LONDON
Since Bank of England Raised It's
Rate Decided Improvement Has
Been shovvn-Wau street Swallows
Bait When Old Trick of Giving
Buying Order to Big House Is Tried.

New York. Oct. 2l-Renewal to-day of
the selling of United States Steel. which
had been so conspicuous on Tuesday
forenoon, naturally aroused considerable
interest. and the inference from il was
that a bear clique had begun operations,
choosing that issue as the one in which a
decline would have the most faT-reaChing
effect. The news on the stock for many
weeks has been the most bullish. and re-
suited in the opening of considerable
speculative account for the rise, and on
this the bears base their hopes of being
able to force liquidation.
Nothing produces such distrust as a
substantial decline in an important stock
like Steel in the face Of good news.
When confidence becomes disturbed at
the very point where it was strongest, the
effect must be important.
As in Steel, so in the other market
Misunderstanding. Union Pacific, and
Southern Pacific-there was an appear
ance Of bear pressure, with little evidence
of influential support. The trading was
very dull, except in the last hour, when
the volume of business increased on the
decline the large interests apparently
taking no part.
Love to Be Humbugged.
That a section of Wall street loves to
be humbugged would appear to be a fair
inference from the success which still
follows the old trick of giving orders TO a
house supposed to represent this, that. or
the other when it desired TO secure a fol-
lowing in a particular stock
This was worked in St Paul to-day, as
it has been many times before. a big
buying order intrusted to one of the so
called standard houses with view of
giving a degree of strength which could
be availed of by the speculative inter
ests TO sell stock through the general
list. An Opportune time was chosen. for
when the buying began the stock did not
come easily. and the traders had already
started talk of a scarcity, when, on the
rise. the supply increased TO a very. con-
siderable extent and gave a totally diff
ferent aspect to the prospects OF the
bullish operation. On the appearance Of
an increase IN the supply the buyers re-
treated, and so did the price.
Since the Bank of England raised its
rate to per cent money has been flow
ing into that institution at very rapid
rate and the probability is that the
forthcoming statement will show a de
cided improvement over the one issued
last week. BY next week the bank viii
again be in a strong position.
1t IS of course matter for COngratU-
latlon that the Bank of England is re-
trieving its position for whatever New
York may become IN the future, London
Is undoubtedly the financial center Of the
fD-Hq hfa
are felt with greater or less force in
every country of the globe
Had conditions there become very SER
ious there is no doubt that heavy Hqui-
dalton of American stocks must have
eVentuated both for the account of fo--
cign holders and for local Spectators
who took advantage of the easier money
conditions abroad when funds were in
limited supply here TO transfer their Dor
rowing 10 the other side
Can Absorb London Surplus
The London joint stock banks encour-
aged such operations until conditions
arose where drastic measures had to be
resorted TO, but there can be no doubt
of New Yorlls entire ability 20 absorb
without serious inconvenience whatever
stocks may be sent here. provided the
dumping process does not so on at too
great a rate
Conditions all over the world are much
the same as those which have prevailed
here during the past year as a result
of the insuficicncv of the circulating
medium. The production of geld is enor-
nous. but has not kept pace with the
tremendous commercial activity here
and elsewhere Few people realize. for
instanca. how active the cotton industry
IN T177F TfrrF7f
thrown on this matter by the fact that
the increase in the productive capacity i'm
Lancashire in the past year has been
One-third of the increase in the prOduc-
tive capacity in all the Southern States
IN the last twenty years. notwithstand-
ing thai in this period the growth of the
CottOn-Weaving industry in the South has
been matter OF pride 10 most AmeTi-
cans
In Germany the bank rate is per
cent although business conditions there
are excellent, the high price Of money
being due TO the great commercial activ-
ity. So ii is practically all around and
probably the best thing that could hap
pen would be "A period of rest in the
security markets until bullish operations
could be conducted without endangering'
The commercial interests.
Banker COmmends Shaw.
With a contango of s per cent on
American stocks in London and a prevail
ing rate of about IA per cent for call
money here, it is natural that the bank
ers should anticipate a considerable re-
ducton in the account open in Americans
by the time CT the next settlement two
weeks hence. The difference Of , cents
in the pound between demand and cables
was not without significance in the same
direction. A prominent banker of the
Middle West whose business relations
with various commercial interests enutle
his views TO a great deal of consideration
strongly cOmmends the action of Score
Iary Shaw in coming TO the relief OF the
money situation on the ground that lit
Will furnish a valuable object lesson on
flexible currency" The point is well
taken.
Bankers have differed in their opinions
as 10 whether or not an emergency cur
Tency should be resOTted 10 for tidng
over money stTingencies when crop
movements were IN progress and the gen
eral business of the country most active
and perhaps in no way could a prep0nd-
erance OF opinion toward one side or
the other be readily secured as by a
trial on n scale sufficient to give appre-
ciable relief while still so small as to
convey no real danger of initiation.
\. q W. Dividend Increased.
So general was the expectation Of an
increase to ; per cent in the Norfolk and
Western dividend that the announcement