Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-09-08
Financial News Letter
BY W. G. NICHOLAS.

BY ". G. NICHOLAS.
NEW YORK. September THE stock
! market recovery of 3 to 10 points seems to
| have satisfied the conservative bull party
| for the time being. and the wisest among
the leaders on that side are well content
! to rest on their oars Some njudicious and
impatient traders and operators see no use
in stopping yet. and are struggling to fur
| Their bull their speciaities. The banks and
| the interests identified with them were very
! willing to see prices move up as long as
| the market action was not accompanied by
notable increase in speculative business.
| The demand upon the banking resources
| did not increase materially in consequence
| of the market improvement, and the great
mass of stocks and bonds up as collateral
| look better the higher their selling Value.
The rise in prices has strengthened the
banking position cons .derably. and has done
| no harm in any quarter except possibly to
encourage speculative faction to get in
! at the top of an initial rally. The I'M
| provement' which has taken place was
| timely and merited 1t was the good for
! tune of the writer of these letters to give
! the signal for a change at the very bot
! tom of the decline Emphatic note was
made Of the fact that conditions were
! changing. and that it was the weight Of
! opinion that the worst that could happen
had been discounted in the tremendous
| shrinkage
| 1t docs not follow from this, however,
| that prices are Immediately going back to
where they started from on the long de-
! cline A moderate recovery was all that
could be expected. and that has material
! lied. Any attempt to enlist the public in
| general speculation or general investment
at this time savors of rank imprudence.
Despite the efforts Of charlatans. takers
and spectators having selfish ends to
serve the pubic Is not going into the
market to any extent. Least of all are
savings bank depos-tors Withdrawing their
! funds and putting them into stocks, as
urged in the display advertisements Of no.
! toriety-seeking near leaders of frenzied
finance. The thrifty classes who have their
savings put away in the banks and trust
+ companies or in life insurance are pretty
! hard-headed lot, a rule. and not to be
Stampeded into converting real money into
/ securities which pay l or , per cent more
than they are getting on deposits-at least.
not while real money can be loaned on good
| security for as much or more than they
could get IN dividends on what they might
! buy.
Money will continue to be the key to the
speculative and business situation for the
next six months That appears to be ad-
| figured out a majority of bankers and finan-
| cial sharps are reaching the conclusion that
the money outlook for the autumn and win
| ter months will be improved over recent
expectations to the extent that while there
may be no reduction in interest rates 1t
will be possible to get money at the quoted
prices. The anticipation down to a very
recent period was that there would be no
money available except to favored borrow
| ers. no matter what the rate. The differ
ence between the two sets of expectations
| is that whereas in the one case there would
| be no money at 6, or per cent, it will
now be possible under the second set of
conditions to secure what may be absolutely
needed to carry on the business of the
country Apparently under the most favor
able auspices there is not going to be any
surplus for speculation in stocks. If this
analysis of the situation be correct, then
hopes for big bull movement in securities
are not to be realized.
| A. quiet but influential element In Wall
street is meditating upon bear campaign
| in the industrials. the purpose being to
make a leader of Steel preferred. To the
| outside public attack upon Steel pre-
] ferred might seem the height of folly akin
| to an assault on government bonds. That
| Is one of the choice industrials in high
| favor with investors. 1t has found general
Judgment in the tin boxes and esteemed by
banks as excellent collateral The
steel corporation has worked itself into
| capital. and literally dominates the iron
and steel trade Of two continents The bear
ishly-inclined party, while recognizing these
patent facts, feels nevertheless that Steel
preferred Is scheduled for decline. They
| reason after this fashion: That particular
issue suffered less on the great decline
| than almost anything else on the list, II
was one Of the stocks that was most tight
| ~ held, and on only few special occasions
was special pressure observable. Latteriy.
however 1t has been fed out stealthily. and
has lust paid dividend and holders will
get nothing more from it for another three
months. go
agents are singing in joyful chorus that the
deadlock in the copper metal market has
| been broken and that everybody Is satisfied
with the latest reduction to IL cents. where
the price Is to remain forevermore. For
some reason the big consumers and users
of copper not joining in the glad &C
claim. They are not unanimous that IL
cents is the figure at which copper should
be fixed permanently. They have the temer-
ity to say that 10 cents would be better
quotation. and at which price most miners
can make good profit on production Some
of the rosy promotion schemes which have
been foated on the basis Of 25-cent copper
may go to the wall and many mines which
were to yield fat dividends on copper sold
at the high price may never be heard OF
Is cents and stay there. Still. there are
enough good mines which can dig out cop
per at 10 to IL cents to supply all that may
be needed at the low figure
~
While there is a manifest disposition to
divorce the stock market from fool politics
II is impossible to Minimize the disturbing
influence of political agitation OF a serious
kind. This Is shown by the increasing at
tention being given to tariff discussions
That Is something which the business world
understand anu WHICH, may SANS bAouiiu
FOR warranted fear of real trouble. A
vision down" might be seized upon as an
excuse for cutting and slashing OF wages
and of unpleasant readJustments IN many
directions 1t being the human habit to
discount the future, anything which looks
like substantial action for cutting down
of the schedules will be greedily seized
upon by the bearish contingent in every
quarter to get on top of the markets and
coin agitation and alarm into money. Men
With memories are mischievously barking
back to previous tariff campaigns. which
were invariably attended by business de-
preston and a scaling down Of prices.
The nerve of the oppressed wealthy class
| seems TO have recovered from its attack OF
Rooseveltphob:a 1t is giving less attention
to and caring less about what our honored
President may be saying or thinking. or of
his plans for the future. Languid specula-
ton is being INDUCED in as to what he will
saw new in his forthcoming six speeches, or
in His next message to Congress, but the