New-York tribune., 1907-03-18
THE WEEK IN WALL STREET.

The United States In general was not con-
cerned IN the decentralization that swept the
Wall Street markets last week though IN
circles where the pinch Of loss was felt most
severely efforts made 10 create the I'M
preston that the slump in values was Of coun-
try-wide effect ana that II represented the Gu
mulative results OF political agitation against
corporations II was a rich mans panic. 1t
was panic based on speculative and monetary
conditions and the refusal Of the public for
many months 10 buy securities at inflated prices
rather than a panic based on the factors as
cribed by the Wall Street element-namely, gov
eminent regulation of the transportation COM
panies The decline was not accompanied by
adverse developments in the world of business
There was nothing in the industrial situation
that warranted the sale of good securities in
trinsic values were not decreased because of
speculative opera tons on the bear side Of the
market and dividends that are on conserva-
tive basis were not placed in jeopardy because
Of the feverish unsettement in the Street Re
garding dividends il may we'll be repeated
that in many recent dividend announcements
there has been a total disregard of the conserVa-
tism that ought 10 guide oil deliberations af-
fecting the declarations Of the amount of in
terest a security shall pay to its owner as in
stanced in the case of the Union Pacific divi-
And it is an interesting fact that the selling of
the shares upon which big Increases in dividends
have been made mas been particularly marked
in recent weeks There is a well grounded fear
that the companies cannot maintain dividends
on the extravagant levels that have been estab-
Iished for many issues. and II is felt that rail
road directors in some instances, while endeavor-
ing 10 treat their stockholders with the utmost
generosity have exceeded the bounds Of pru-
dence
Few people believe that the Union Pacific
Railroad Company will be able 10 maintain its
common stock on a 10 per cent basis for any
length of time, reflection of which is presented
in the persistent selling pressure that has ao-
companied the movements Of the stock. and
even the usually conservative Pennsylvania
directors are thought TO have used poor judg-
ment in advancing the rate on the stock TO
per cent. particularly as the increase was de-
cided upon al a time when the company was
making expenditures its property that in
volved the borrowing Of heavy sums Follow
ing the declaration Of the 10 per cent dividend
on the Union Pacific last year there was
rapid advance in the price Of that stock and OF
every issue dealt in, many people. mostly in
terests with large financial resources. loading
up with securities AZ high prices, in the conf
dent expectation that the market would he car
red 10 still better figures and that by January
of the current year quotations Of the greater
number Of securities would be AT ievel when
would result in enormous profits This theory.
Of course was based on the belief that the
public as usual would come into the market and
relieve the holders Of their burden For various
reasons this idea did not make good. Soon after
the Union Pacifics dividend advance stocks
gradually began to recede The public would
vened, spectators for the decline made much Of
the governments attitude toward corporations
the Interstate Commerce Commission began 10
get active Mr.. Hartman was placed the
stand to tell about the Alton deal. many actual
holders Of securities decided TO convert their
possessions into cash. and the railroad man
ayers and railroad hnanciers who for many
years had had things pretty much their own
way. became pancstrcken over the passing by
state legislatures Of restrictive legislation af-
fecting the transportation compa MES at last
appealing 10 the President OF the United
States for protection while asking the public
for its support And all this time the money
situation affecting speculative accounts was
growing more dangerous. whbe the so-called
lambs for once in the history Of the Street re-
fused TO be turned into moycoddles in the in
terest of people who overburdened with all
kinds OF securities. Also in all this time the
general business affairs OF the country were
moving along 10 the accompaniment Of pros
perity and TO the satisfaction Of the merchants
and manufacturers never before recorded.
Stock market interests gradually com
PEELED 10 hquidate their holdings OF long stock
money advanced. and additional margins
were required by the banks and commission
houses-a situation Of which advantage was
taken 10y the bear party, which waxed strong
under the influence OF constantly increasing
profits. In addition the factors named. there
were private grudges that certain interests set
tied through the medium Of falling values
notably in the case Of the so-called Rock Island
crowd, which, in return for the Alton wash
pail received from Union Pacific fnanciers
hammered the 10 per cent Union Pacific stock
To price that involved heartbreaking losses TO
the Union Pacific insiders and their friends
The strongest and best organized bear party
that ever operated IN the Street was one of the
big factors that pushed the market into the
speculative panic March II. its profits run
ming into the millions, compared with losses
about heavy by the rich men who were com
PEELED to throw over securities at a tremendous
sacrifice. on Wednesday prices dropped from ,
10 10 points. and Thursday the decline ran
from 10 20 % points, and the fact that the
movement not followed by serious trouble
in commission houses was considered most un-
usual and without precedent in the history of
Wall Street panics
The reason for the absence of failures. how
ever. IS easily explained. Commission houses
were not hampered by a weak public following
Their accounts represented rich men. who either
sold their holdings supplied extra margin.
Moreover. the greater number of commission
houses had been preparing for a big slump for
. enanv-