The Washington herald., 1907-08-19

New York. Aug. 1s-In spite Of de-
cline which last week carried the prices
Of securities dealt in on the New York
Stock Exchange down 20 a lower level
than any TO which they had before de-
scendcd in recent years, the trading was
at no time dem0ralized. and only once,
and then but for a short time. did con-
ditions nearly approximating demOrali-
zation prevail
That there was liquidation forced and
urgent was everywhere admitted. but
the market was at all times able to sus-
tain the volume Of selling without de-
generating into a state even remotely
| resembling panic and only once during
about fifteen minutes on Thursday NOM
t ing was II necessary for the sellers Of
/ stocks 10 offer them down in order to
attract bidders, except in the case Of a
/ few inactive issues like the Allis-Chal-
mers securities and Metropolitan Street
Railway, which were affected by special
causes.
! Such an orderly liquidation has rarely
/ been seen, and II it has now run its
course the situation in Wall street may
/ be stronger than IL actually was when il
/ looked much better several weeks ago.
/ Every house in Wall street thoroughly
4 understands that the banks viii insist
4 upon a - per cent margin OF collateral at
ali times beyond the amount Of loans,
and understanding this takes such meas
/ ures as TO make il unnecessary for the
financial institutions 10 exert any pres
sure 10 keep loans so well margined that
! there cannot be any concern as 10 the
/ absolute security Of banking operations.
/ Liquidation by Alarmed Investors.
/ It would, Of course, be a great mistake
I TO assume that only speculative lines OF
! stocks have come upon the market re-
Gently There has undoubtedly been liq-
uidation by a class Of investors who have
/ become alarmed over the governments
attitude toward the corporations and who
/ have thought it the part Of wisdom 10
withdraw their capital from investments
/ in railroads and industrial companies IN
4 I'll the fuH effect Of the campaign now be
/ ing waged by the administration can be
/ measured and determined with reason
/ able accuracy. Neither would ii be cor
/ rect 70 assume that this mistrust has be
! come quite general. for there IS evidence
/ that another class OF investors, attracted
I by the low prices, have been buying
! stocks in moderate way, and, indeed,
without this factor it is hard TO see how
| a panic could have been avertd-
! But that the policy Of the sdministra-
/ ton has created great and widespread
/ alarm among investors in railroad and
/ industrial securities is made manifest By
/ the extent 10 which liquidation has gone
/ on IN these. while other kinds Of invest
ment not directly attacked have shown
\ but little depreciation. It has been said
/ that the President intends 10 make some
/ reassuring statements in the course Of the
week and if this proves true some good
may come of it in reducing the force Of
I the blow which Eust be dealt to general
/ business by the mistrust which investors
now feel
Choice of Lesser Evils.
The market rallied sharply at one time
| on rumors that, instead of prosecuting
/ corporations for violations Of the law. the
/ Department of Justice would hereafter
endeavor to reach the guilty individuals.
so that the innocent stockholder might
not suffer by the imposition of a fine
upon his property for the violation Of
the law Of which he was ignorant until
the offense had been proved in the courts.
If Wall street felt assured that prosecu-
tions of individuals would not be insti-
tuted in a vindictve spirit and that
popular suppositiOns would not be allowed
to outweigh actual evidence in establish
/ ing convictions, it would approve the
I change, not as something sufficient 10
restore confidence to the financial COM
munity, but as a choice of the lesser
OF two evils. Wall street would thorough
" approve OF the conviction of officials
| guilty. for instance, of the Illegal and
harmful practice of rebating, but has
/ good reason to fear, in view OF the flip
pant utterances Of the Attorney General,
that prosecution Of individuals might be
begun eTen where there was slight evi-
dence to warrant it. and merely on the
idea that it was truly sp0rtsmanlike to
attack big game.
AIabama's Rate Case.
In Alabama a Federal court judge has
lissued an order to restrain the State from
putting into effect against the Louisville
and Nashville Railroad the reduction in
freight and passenger rates provided for
in laws recently passed by the.legislasure,
rand the curious condition &s thereby
been created that while one of the large
railroad systems operating in the State
must handle business on the basis of
the reduced schedule, the other cannot
legally do so The State officials, with
characteristic lack of knowledge regard
ing the real railroad situation, seem to
think that Louisville and Nashville must
lose heavily by the diversion of business
TO the Southern Railway, but that this
cannot happen is evident to ali who
understand how the Southern Railway is
at present overtaxed to take care of the
traffic that now falls to its share
Financial situation.
The advance In the Bank Of England's s
discount rate to AZ per cent weeks ahead
OF the usual time Of marking up the rate
IN the autumn has forcibly directed at
tention to the stringent money conditions
abroad as we'll as here, ana as domestic
exchange at Chicago is down to the point