The Washington herald., 1907-05-29
WALL STREET NOTES
Borrowers Deprecate Size of
the Short Interest.
MARKET TO HARDEN SLOWLY

Spectators DiSpIeased Because of
Lack of Chance to Turn Quick
Profits-Investors Protected by Big
Firms-OutTight Buying of shares.
Not Worried AbOut President.
New York. May 2S-The borrowing de-
mand for stocks was greater to-day than
at any time since the bear movement be-
gan, and. what made It all the more sig
nifcant, il was not confined 70 the room.
| as had been the case at the end of last
/ week. Every large house known to have
a line of stocks was called up with re-
quests that Il lend this or that active
issue and the amount Of lending done in
this way was largely than on any other
day in weeks past
As a matter of fact, until to-day. there
was hardly any private borrowing. but on
the contrary, the demand in the loan
/ crowd WAS made as great as possible SO
as to create the impression that the short
/ interest was very large.
! Now. apparently conditions have
| sanged SD much that instead Of making
] the short interest appear large. efforts
are made TO have II appear as small as
/ possible. The manipulation of the loaning
/ rates last week was designed to foster
/ belief in a strong technical position that
/ did not exist the private borrowing at
/ this time Is designed to conceal Il strong
| technical position that may be very real
/ With an active borrowing demand out
/ side, il is altogether likely that the short
interest is, relatively, considerably larger
/ than usual
/ Toward the end of last year certain
houses made a practice of appearing in
/ the loan crowd at the opening every
morning 10 borrow money by lending
stocks 10 the shorts. AT about II a. m,
and again az about 2.55 p. m., they ap-
/ peared again regularly to scoop up what
/ ever money there might be- found with
/ the borrowing demand f0r stocks from
| the short interest.
The natural conclusion from the extent
I 20 which these houses were lending
stocks was that they were carrying
/ larger lines than they were justified iu
/ carrying, and in many conservative quar-
ters their position was regarded as a
menace 90 the market
The same houses are now conspicuous in /
the loan crowd, as they were then, only /
that instead OF borrowing money they are I.
borrowing stocks Their position again 4
gives rise 20 uueasiness i'm conservative /
quarters where violent changes either in I
the direction Of advance or decline in /.
prices are not Telshed.
These houses were evidently long Of 4
stocks al the top. and for q long while /
after the decline began. They must have 4
liquidated al a loss Now they are short /.
after a severe break when. in the opinion /.
Of the best judges on the point values are |
well above prices They plunged on the /!
hgll side at the top; they are now pung- /
ing on the bear side, perhaps at the bot /
tom They overslayed their market on T.
the bull side They may make a greater /.
mistake in lingering too long on the other /
side
The first attempt 10 rally the market dld 4
not meet with much success, and did not I
deserve TO. because it was based on the 1
wholly impossible assumption that the /
President would. in his address at Indian /
apoIis on Memorial Day, say something Of /
. so reassuring a nature as 20 Offset "A good /
deal of the anti-railro3d legislation and I
the corporation batting that has done so .
much to bring about the present condition .
Of semi-demoraiization in the securities .
markets. Rum0rs Of this kind were given
currency 81 few days before the President
delivered his jamestown speech and had .
even done service on an earlier occasion.
When they were revived yesterday every /
body took IL for granted that they were
Of the "too-good-to-be-true' variety.
Interest in the rumors attempting 20 /
forecast the Presidents speech had hard
lv died away when the foreign houses
began to receive news that Lord Roths-
child had given out bearish interview.
This had at once the effect Of checking
whatever rallying power the market pos
sessed at that time After the selling
orders that had accumulated over night
had been completed and the commission
houses had sold out the accounts OF Gus
toners who failed 70 respond TO calls for
margins. II began 90 look as If the liqui-
dalton that for days past had been
serious factor on the side of declining
prices had either ceased temporarily or
had been completed altogether. 50 that
the shorts could not count upon it to
further increase the floating supply OF
stocks from which their requirements for
the covering Of contracts would have 90
be drawn.
According to trustworthy testimony.
there has been quite a little genuine ia-
vestment buying in the market within
the past few days The effect of this will
be to take away a certain proportion of
the floating supply Of the best STOCKS and
lock it up for some time. If not perma-
nently. This curtailment of the float
ing supply will make it more difficult for
the bears TO successfully pursue their
operations. although Of course. a sharp
recovery in prices might induce some Of
the investors TO take profits in the hope /
of getting their stocks back in the event
Of another decline.
As TO whether liquidation has been com
pleted, opinions differed widely. and per-
haps none OF them was worth much, but
the most conservative interests COntended
that intrinsically most Of the good stocks
were worth more than their present
prices, even with the fullest allowance for
the unfavorabIe factors In the situation,
such as the relatively poor crops pros
poets and the probability Of a contraction
in the volume Of general business.
Floor traders and spectators working
on the bull side were disappointed be ,
cause the rally did not go farther They
wanted quick action, and thought the
large interests should have given it 10
them. But the large interests saw matters
in different way and believed that a
steady and slowly hardening market
would be the best from the point Of view
of every one except the speculator, who,
II he got a quick profit on the bull side,
would turn his attention TO making an
other on the bear side. Not for his bene-
fit. but for that Of the investor were large