The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1907-03-16
A Doctors Diagnosis.

A Doctors Diagnosis.
Some time back when stock traders
were making n "bull market" with
money lending at 1876 per cent, the
New York Evening Post gave warning
that that sort OF '"high finance was
the forerunner of panic. Now that the
panic has come, and gone, let us hope,
the reflections of the Evening Post are
worthy of consideration.
The panic, in the Evening Posts
view, was not due alone or especially to
government regulation and hostile
State legislation. Looking at the sit
uation in the broadest way" says our
contemporary, 1--WE can cite at least
four reasons for the recent phenomena
OF the Stock Exchange. Let us grant
that the 'anti-railroad demonstration,
especially as described and denounced
by railway officers, has operated not
only to deter investors from buying
railway stocks, but to cause actual
selling. A banker familiar with the
recent situation would undoubtedly add
to this first that Stock Exchange
values were forced up. last autumn, to
level where the yield to investors, at
the price, was barely half what cap
ital could earn elsewhere; second, that
recent public disclosure of sharp prac-
tice in railway finance, by important
railway insiders, had spread distrust
of their methods in the market; third,
that the money market, at home and
abroad, was in highly abnormal sit
uaton, calling for some relief, which
! might be obtained through reducing
the burden of Stock Exchange liabili-
| ties"
| The Evening Post does not assert
| that any one of these influences is
| paramount, but 1t draws particular at
| tention to the money market, because,
| 1t says, in the view of all intelligent
flnanciers. that is the phase of the sit
| uation which Is most perpleXing, and
whose eventual bearing on all markets
| cannot fail to be fundamental.
4 1t then recalls that more than a year
ago all the great money markets OF
tho world began to show signs that
L
done. Last years New York money
rates and bank reports repeatedly be-
trayed the weakest position shown at
the time of year in more than quar-
ter of a century, The Bank of Eng
land discount rate, the index to Lon
thirteen weeks at the maximum figure
Of the past thirty three years, and is
now ut the highest quotation reached
during March in a still longer period
while the Imperial Bank of Germany
, which largely reflects the continenta
: ruary at the highest figure ever main
!, tanned during that period.
) These facts are we'll known, an,
bankers Lave been calling attention t
, them TO: eighteen months. Therefore
the financial and business communitie
were not caught off their guard. Th
Stock Exchange was also aware of tn
situation and would have been bette
I prepared to weather the storm blu
! for last autumn's reckless attempt
: stir up bull market" in the fac
of the money stringency.
II Tn fine, the stock traders blew bi
:. bubble and kept on Initiating it unit
q it collapsed Hostility to railroads
u may Have priclsed the bubble, but til
~ bubble itself was of Wall Streets ow
making,
- Our New York contemporary dot
y not regard the bursting of this bubb
~ as a national calamity, On tho col
trary, 1t says that Stock ExchanI
liquidation, and the release to leglt
l. mate tra % of capital improperly tt,
- UP in speculation, have corrected
great part of the evil