Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-09-02
Financial News Letter
BY W. G.. NICHOLAS,
Special Dispatch to The Star.

NEW YORK, September 1.-The men in
command Of the stock market made an i'm
pressive demonstration of good generalship
after, the sensational Philadelphia bank
| failure. They put their shoulders under
shaky situation and gave the market the
kind of solid support which impaired to
| a nervous following a degree Of courage
supremely needed at the time. The bull
| trading contingent displayed panicky symp-
toms which needed very little to develop
dangerously. This feeling was neutralized
| by superb bull leadership and the market
| took on a complexion OF substantial
| strength Concerted and effective effort
| was made to minimize the Importance of
| the bank wreck and to localize the damage
Ito morphine a morbidly suspicious public.
Yet none the less belief and opinion is
turning into conviction that there is not
| going to be enough money to finance specu-
| lative booms in stocks and real estate and
carry on legitimate business during the fall
and winter months. Gambling money will
| come high. The footing OF great banks in
| Chicago and Philadelphia calls attention
J harshly to the ease with which dishonest
officials can use the funds. of helpless de-
positors for reckless promotion and wildcat
low general inspection and housekeeping
| among the banks and trust companies Of
the large cities. The situation demands It,
Whatever may be the danger Of uneovering
! dwarfs into insignihcance in comparison
with the danger OF delay. Popular con-
f1dence once shaken ever so little feeds on
fear. Blacklist truth becomes preferable
| to doubt, uncertainty and secretiveness. It
| is to this crisis that the situation is APP
preaching. fact well understood and ap-
preciated in Wall street.
On the six weeks stock market rise there
was very heavy distribution Of shares. The
unloading did not go as far as the combi-
nations would have liked. but a hugh
atr~Ixk kha1&
ferred to the shoulders of the public and a
| rich semi-professional element sometimes
| called office traders" The combinations
find themselves better equipped to
How the public and the semi-professionals
will fare remains to be seen. Should fur
| Their distribution Of stocks seem possible
| they will get the help Of big people; other
| wise the labor of maintaining prices may
not prove easy in the face of tight money
| for the next six months. The surplus
funds Of provident time-money borrowers
| serve to keep down the call rate for the
moment. but this relief Is recognized as of
| the day to day kind The demand for
money to carry over into the new year has
a commission of l and 2 per cent. The
| theatrical inauguration of a formidable gold
| import movement (for which the stage has
already been set) may favorably galvanize
yet everybody will know that the gold is
| borrowed extensively, circumstance likely
| to offset the good effects of the play.
= ~ 4
America has probably never been as
| heavy a borrower abroad as this year. It
| has made enormous drafts on its credit in
| London and the various European centers
| and has largely anticipated the years pay
ments for our products-grain, cotton pro.
| visions and manufacturing wares. Every
! source through which money could be bor-
| rowed has been used. More than that. I'M
usual efforts have been made to place our
| stocks and bonds with foreign investors.
| This latter expedient has not been success
lots. In fact. the drift has been the other
| way-foreignerS having resold a good many
American securities and turned them back
upon the New York market. i Is very
| evident, however, that our credit abroad
| Is very far from being exhausted. There
Is an Immense reservoir OF gold available
should the emergency require its shipment
! to this side Of the Atlantic. Two or three
times lately q start has been made to bring
| foreign gold into New York, but only once
| did the movement amount to much. The
| New York banking combinations have it
may need, and they are likely to make an
impressive demonstration any moment
should the exigencfes require 1t.
At the beginning Of the bull campaign
the Wall street combinations had great
| mass OF undigested bonds and stocks.
Being unable to sell the bonds they were
obliged to make market for the stocks.
| and that necessity was the impelling mo-
| tive behind the current sweeping manipu-
lation for a rise. The banks made 1t plain
| that they could not provide funds to carry
| both stocks and bonds for the combinations
| designated as the powers" These pow
ers' In ordinary times control the policy Of
/ the banks and trust companies, az well as
| the insurance companies. but these institu-
| tons owe larger duty to the public which
| they are careful to observe in periods of
| STRESS and those in official charge sound
| notes OF warning whenever the occasion
really arises for an important stand look
| Ing to q maintenance of position and credit.