New-York tribune., 1906-07-02
THE WEEK IN WALL STREET.


At times heavy liquidation was reported rne
selling representing the operations of interests
who practically were compelled to throw ueH
holdings on the market and pressure from the
professional element. which was aggresslVely
active on the short side Of speculation IN the
greater part OF the six days Of trading Inc
absence OF an outside demand for securities ana
the known weakness OF certain pools and under
writing syndicates naturally encouraged opera
tions for the decline. and at the close Of the
week sentiment in the Street favored the theory
that further readJustment Of values TO a lower
level would take place, Notwithstanding the ad-
mittedly strong position Of conditions in general
affecting the intrinsic value of American stocks
and bonds Fundamental conditions are sound
and operations for lower prices are based more
on passing unfavorable speculative influences
than on the actual position Of tho country's
trade. The element, however. which is working
for cheaper quotations asserts that while there
is at the moment no indication Of change in
the position of the nations industries. factors
are gradually working toward that end, and
that in the course of the next year there will be
a marked reaction in all lines Of business. This
idea IS based on the belief that the wave of
prosperity has been running so long in one di-
Tection that 1t must change its course, and
that with the approach Of the Congress cleo
tions in the fall and the agitation which soon
will develop over the arguments which will be
put forth by the two national parties in the
next Presidential campaign. including, perhaps
tariff revision, there will be a tendency on the
part Of business men to restrict their operations
and a disposition on the part of buyers in all
lines to wait for lower prices. Quotations for
stocks and commodities and the general cost of
living are higher than ever before in the history
of the country. and. together with the nervous
tension under which the business world has been
laboring in the last year. suggest to the bear
operator adequate reason for his expectation
of a gradually declining market for securities
Notwithstanding the array OF bear ammuni-
ton. there is no uneasness among interests who
are endeavoring to preserve the stability OF az
fairs in the country. and while investors are
willing to buy securities pending the elimination
OF corporation abuses they recognize the fact
that the so-cailed agitation against badly man
aged concerns eventually will tend TO increase
the intrinsic merit OF American investment
issues. If the crops fail. If the iron and steel
business goes to pieces. if railroad earnings de-
cline and bank clearings fall off. then investors
will have cause for alarm: but no indications Of
such developments are present in the current
situation. Perhaps the adjustment Of values in
all lines TO a lower level would benefit all mar
kets. and If spectators natural events sue
ceed in bringing about cheaper values on the
Stock Exchange an opportunity would be afforded
for careful buyers to invest their money profit
ably. The foreign markets still show signs OF
disturbance as result OF the internal conditions
in Russia, but fortunately European capitalists
are exhibiting more interest in American securl-
ties and it is likely that If industrial and fnan-
ca affairs in the United States continue IN their
present stable ara prosperous condition there
will be at no remote period large increase in
the amount OF foreign money invested in the
stocks and bonds Of first class railroads and
other corporations. There have been and still are
reasons for speculative liquidation, but there is
nothing foreboding in the investment outlook
and no reason for alarm on the part Of investors.
Absence of a public demand for securities does
not reflect financial depression among the people,
nor does the effort Of the government to elimi-
nate graft" and rottenness among the railroad
and industrial corporations foreshadow down
ward movement in American industries. The
common interest is being served by the aggres-
sive tactics Of the Washington administration,
notwithstanding the opinions Of Wall Street to
the contrary. Wall Street is highly exercised
over the attitude OF President Roosevelt. and
there are even some conservative bankers who
exhibit signs of hysteria over the determination
Of the present government to investigate cor
porations and to prosecute the rascals who for
many years have been feeding on the public.
The government, however, will continue in busi-
ness and the countrys industries will prosper.
though stock market spectators, including pools
and syndicates which have overreached them
selves may suffer further severe losses.
It is quite probable that the present read
justnlent Of speculative holdings and values will
result in a more healthful Wall Street position,
and later on serve to bring about a situation
which will encourage a better demand, both for
new and old securities. The market is stil
gested with new issues. but with the reactionary
tendency in prices wider distribution will take
place. although this will be accomplished at the
expense of speculative syndicates who for many
months have been carrying stocks and bonds in
the expectation OF selling them to the public at
higher quotations than those ruling Stocks
being liquidated by pools and individuals
find their way into strong boxes In the current
decline there is no evidence that Wall Street is
discounting the development Of an adverse
change in Industrial conditions inasmuch as the
country's general trade presents no indication
of depression in the near future. Business con-
ditions az reported by the commercial agencies,
present features which point toward further ex-
pansion in the cOuntry's Industrial activities.
Notwithstanding the liquidation and declining
values on the Stock Exchange. Railroad earn
ings for the third week in June show large gains
over the corresponding period year ago, when.
it may be recalled. the volume Of traffic was
heavy In all parts Of the United States while
bank clearings indicate that a large volume of
business IS being transacted in all departments
OF trade. Collections are excellent. better than
they have been in many years at this period ac-
cor6lng TO advices received by local banks from
out-of-town merchants and the latter as rule
report q large enough business to warrant an in
crease in their loans for additional working cap