New-York tribune., 1907-08-05
THE WEEK IN WALL STREET.


due entirely to technical speculative conditions
The market was oversold, and the natural result
followed. There was no commission house demand
for public account and no indication of an aWak-
ening on the part Of the outsiders to the attrac-
tive opportunities in the investment lists nor was
there any activity the part of the substantial
Wall Street interests who, az rule, are 1ouhd
the bull side Of speculation. Throughout the
week the market wholly a traders AFFAIR
and according to the opinions Of the best in
formed market followers. traders operations VIII
continue to be the dominating influence on the
movement of values for several weeks TO come
August is supposed to be q bun month. Many
people are looking forward to actfVity the long
side Of the market in the current month because
of precedent. but there are various reasons which
suggest the improbability of aggressive opera
tions for the bull account though there is no
good argument for lower quotations The mar
let has had long rest and ii doubtless VIII pe
compelled to wait a further time before it will
into an cid fashioned bull movement Dul-
ness in speculation is hard on the commission
houses. but bull campaign at present would
end in disaster. and quickly. too. the erect OF
which would be to postpone for many months
genuine upward course Of values supported pE
outside buying that undoubtedly viii develop if
little patience is exercised. The larger wall
Street interests are not in position at the
moment TO back bull market, the public has It's
money actively employed in the channels of
trade and does not care withdraw it, and The
banks have not enough capital available for the
purposes Of stock market speculation. This sit
Uation does not encourage the idea that an! thlns
more than q traders market will be seen IN
August. Traders may operate on the long side
for a time, but without public buyers there
would he no profit in maintaining such posi-
tion for any extended period
The readjUstment OF trade to 4 quieter has
e aDd yYI iS
noUuCed there will be money for use in
Wall Street, a better demand for bonds and \
chance for tied-up underwriting syndiCates to
get out OF their holdings. No one expects bust
ness depression. All conditions against II,
but a slowing down process in the industrial
world is coming. and it will be welcomed in
most quarters. especially in Wall Street. The
latter has had its readiustment and 1t wants
10 see the same development in the commercial
world, and though for time traders may sell
stocks short on the talk of business reaction.
the rank and file in the financial community
will recognize in such a movement reason for
thanksgiving. The gradual receding OF prices
in some Of the staple commodities on which
leading industries depend already is noted and
is the most significant feature OF the markets.
Copper prices have been reduced, and probably
will be placed on a still lower basis, iron and
steel prices have dropped a dollar two a ton
and lumber is also lower High prices for
money the world over are bound To reduce COM
modify prices, and eventually this movement
viii lower the price of labor. Prices for every
thing have been too high. and their adjustment
a cheaper basis will in way upset the in
dustral prosperity OF the country; indeed, it viii
serve to strengthen underlying conditions and
protect the nations business against serious
collapse. There has been overstinulation in
business, Just there was oveTspeCulation in
securities q year ago Overstimulation in busi-
ness is bad overspeculation in stocks, and
0na keT Wi N
Fortunately the business men Of the country
recognize the weak points. which on the surface
appear strong points. They are preparing for
a change, and a consequence there will be
radical unsettlement of our industries.
The report Of the United States Steel Corpora
ton for the second quarter OF the year, which
made public last week, showed earnings
larger than in any preceding quarter in the his
tory of the concern, but in an official statement
made after the meeting OF the directors il was
pointed out that orders for the month of July
had fallen off from - to 30 per cent COM
pared with the same time year ago. Lighter
orders were due chiefly to the reduction in con-
tracts from the railroad companies. which were
unable to secure money at reaSona BILE rates for
the purchase of rails and materials. To some
extent the railroads were influenced in holding
off orders for, rails by the uncertainty over
the outcome IF the conferences between the
railroads and the steel companies regarding the
future quality and price of rails but the main
The United States Steel Corporation is well
fortified to stand period Of trade reaction
even trade depression. The aim OF the able
mana cement has been to place the company
in a position. physically and financially, which
would enable 1t to pass through a period OF
hard times without experiencing unfavorabe
effects. and while it is conceivable that in tho
future a time might come when it would be
necessary to pass the dividend on the common
stock it would require an enormous stretch of
the imagination TO suggest the possibility OF the
development OF times when even a reduction
would be made in the preferred dividend United
States Steel preferred is one Of the best securl-
ties that can be bought on the Stock Exchange,
and at It's present price it yields practically the
amount OF the dividend paid, per cent In the
last quarter after providing for interest, sink
ing funds depreciation and reserve funds, the
cnmpanv showed a surplus of S;i0S43512 From
this was deducted SS,S46,432 for dividends the
balance being put aside as a special approprla-
ton for additional property, new piants ne"
construction and discharge of capital ob!iga-
tions There is no industrial concern or rail-
road IN the country that could make such rec
ord The United States Steel Corporation does
not have 10 borrow money for new CONSTRUCTION
II makes all the money ii needs for interest and
dividends and has plenty left over for purposes
connected with its physical expansion
There is no occasion to worry over gold ex-
norts A small shipment was made last week.
and further amounts of the metal may go out
though at the moment foreign exchange market
conditions are against a movement After the
shipnent which was made on Tuesday exchange
declined while the Paris check on London ad-
,-anced and at the close of the week II would
have required extraordinary inducements on the
mart of Paris to attract the metal from New
York London, Paris and Berlin are suffering
from q financial strain due to special causes
London is cndeavoring to protect its gold sup
plv Paris is doing everything TO increase its
holdings Of the precious metal and Berlin is
lacking around for money and is shaking from