The Washington herald., 1907-04-02
Traders Take Inventory of
Market Conditions.
GREAT STRAIN UPON CREDIT
Rate Legislation and Attitude Of
State Governments Also Given as
Causes OF Decline In Securities.
Mondays Trading Shows Advances
in Most of the Leading Issues.

servers OF financial affairs during the last
week. The general causes making a de
cline in quotations for securities that have
been operative for many months back are
now thoroughly recognized.
They include. or did include. chiefly the
worldwide strain upon credit. the fear Of
investors regarding the results of the at
titude adopted toward corporate enter
pTises. especially railway companies. by
The President Of the United States. and so
many different State legislatures, and the
blow 10 confidence in railway stocks dealt
by such disclosures as those concerning
the management of the Hartman lines.
That ali these factors would have been
sufficient in themselves TO bring about
notable decline in market prices is now
admitted by everyone. But beyond an
this the specific influence brought TO bear
against the stock market recently has
been "a selling Of stocks by. spectators for
the fail in greater degree and with an
amount Of utter reckiessuess not seen fn
Wall street since The dark days of 1886
during the first Bryan electoral campaign.
new race OF speculative plungers on the
short side Of the market was seemingly
called into existence, and the extent of the
commitments of these operators ran TO
extreme lengths.
At the low point touched by prices a
week ago, the stock market was un-
doobtediy in the most Oversold condition
that it has been for more than a decade.
When the period of hysteria ceased and
something like calm consideration of the
financial situation began to prevail il be
tf,.lf1l 1f
dition, in turn. certain other results would
happen. \ foretaste of these consequences /
was given to the market last Friday, when
the Spectators who had made contracts
10 deliver Canadian Pacific stock that they
did not own endeav0red TO close their ac-
counts. They found that at the ridicu-
lously low prices that they had offered the
stock the shares had been taken by ac-
tuaI investors. "a very large number Of
these purchasers being foreigners.
Another Upward Movement.
Renewed efforts TO cover caused an
upward movement in the price Of the
stock far more sensational than the pre-
vious decline i'm it, To-day the Canadian
Pacific shares were in such demand that
"A premium of lilo of per cent was paid
for use over night. and although no other
premiums were exacted for the use of
other stocks, still the lending rates on
money on them were SO low as 10 clearly
indicate the true state of the market
Canadian Pacific stock sold at price s.
points higher than the lowest figure
touched by il q few DAYS ago. and while
10 such great recOVeTics as this were
shown elsewhere in the market to-day.
the enforced buying movement that went
on was mdnfestly OF the same general
description as that in the instance de
scri5ed.
Covering purchases were made I'm d par
ticularly peremptOry manner I'm the Anal
gamated Copper. Union Pacific Brooklyn
Rapid Transit and Atchison common
stocks, these being those upon which the
former selling pressure had most power
fully converged. In the ease of AtchisOlt, /
belief is still strong among Well-informed
people that the directors Of the company
viii al their meeting 20 be held a few
days hence, place the common stock OF
the corporation upon a 8 per cent dividend |
paying basis. The earnings Of the COM
p3Hy warrants such a step. and it is held /
that the recent commotion i'm the stock /
market would not at all disturb d de-
termination duly arrived at for business /
reasons
Advances throughout the market in the |
standard shares were generally from TO 1
3 points. The Northern Pacific and Great /
Northern preferred stocks held back a |
little, seemingly because of the news that /
the directors of tho Great Northern Com /
pany would hold To their decision to re- /
quire payment in a block on April of the /
Setooo,ooe required TO be paid upon the first /
-four insiailments OF the company's new
$5ao03.Co stock issue.
Rise Not Normal One.
Gratifying as is such an uDturn in the /
market as has been witnessed for week 1
pisi. the fact must be frankly admitted /
tlIat the rise is TO more or less extent of /
an unhealthy character II is an advance /
caused by twisting of the short in
terest in the market rather than by in
vestment on specula tive purchases of /
stocks, and when this short interest is 1
eliminated the market viii be left once 1
more in relatively unprotected state.
The violence Of the rise may be gathered
from the statement that the price of the
standard railway shares has risen nearly
90 points since tho close OF business q
week ago, and that during the five ses-
sions OF the stock exchange since that
time there has been no recession in prices
whatever There is OF course not the !
slightest doubt that stocks are still cheap
from the point of view OF those who wish
t9 buy them for cash or uDOn large mar
Gins. bat fl is manifest that the period of /
readjusJment in the market will not be
over until values settle down TO a level
where they can sustain themselves with
out the compelling force of purchases. be
hind them made 10 cover short stocks.
The foreign markets were closed to-day.
and the only influence enanating from
the other side of the Atlantic bearing
upon conditions here. was # was said. /
the receipt of orders from Berlin 20 sell
81 fairly large quantity Of stock In this
market. An unquestionably helpful fac
Tor to-day was the better outlook for
the money situation, caused by fie ia
favorable hank statement published Sat
urday, and by the large gains of the
local banks since Friday of nearly $6.O00-
coo The local subtreasury has. il is
understood, already dishursed to the local
banks, on orders from the government
more than the Sl5091,0o0 provided for In
the Secretary of the Treasury's last order
on the subject The statement Of the
Chief Executive of the nation in regard to
his attitude on railway matters. pub
llsnsa Immediately after the close Of bus
mess was entirely on non-cOmmittal
order.
1t reafirmed The determination of the
President TO secure, if he could, legisla-
tiOn 1T the next session of Congress in
= gard 20 the supposed over-capitailza-
ton of railway companies, hut contained
the declaration that the President was
not IN favor OF any statement for a phys
cal valuation by the government of rail-