Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-09-15
Financial News Letter
BY W. G.. Nicholas.

all the advance It is entitled to and prices
have back-tracked once more. About all
the market leaders hoped for was to arrest
the decline, and a recovery of three to ten
points seems to have accomplished that.
Opinion seems to lean to the idea that an
other reaction is due but so far as can be
observed there are no signs Of panic or
Generalization. Everybody seems to agree
that for the next three or four months the
stock market will be governed by the price
Of money. For the moment effort is d.
rected to convincing people that money Is
going to relax and that rates may drop Off
a point or more. The purpose of this ad-
vertisement is obviously to inspire conf
dence. There is very slight probability that
borrowers can get money in any consider
able amounts at a lower rate than they
have been paying.
Favored customers will always be able
to secure advantage at the banks, but
the great mass Of borrowers still stands
ready to pay outside rates for every dollar
obtanable for four to SIX months ahead.
In the very front rank of applicants for
funds stand the great railroad corpora
tons, and they maintain-that attitude
little people have small chance and the
stock market no chance whatever of being
supplied with funds to extend speculation
on an advancing scale. To put the case
d
bull stock market. nor is there likely to
be for a long time to come Specialties
may be showed up, but no encouragement
can be given to the theory that the general
market Is in for a boom or that the public
is going to put its shoulders under the
load and carry it.
1t would be very nice If we could con-
vince ourselves that there is going to be
{,,,,, j;a{a >f
crease in the available stock of money for
business and speculative purposes. but I'M
fortunately the facts look the other way.
A great many enterprises have been stop
ped for lack of funds, and this interruption
to the march Of Improvement and enlarge
ment of business Is reflected in a let-down
in orders for material and finished product.
Railroads are the chief sinners and Suf-
ferers in this respect Finding themselves
unable to borrow money except at uSoriouS
rates, and not always even then, they
adopted the alternative of shutting down
or slowing down. 1t has not been possible
for them to absolutely suspend operations.
but they are curtailing wherever 1t is pos
sible to do 50. The result is that industrial
and manufacturing concerns everywhere
are obliged to report a decided decline in
new orders. They are all at work on old
business, and the wheels are likely to go
on uninterruptedly for several months to
come. At the same time they very
-
doubt and uncertainty.
X
On this point there can be no question.
Should the money market relax and funds
become available there will be a continual
ton Of activity, but If depression becomes
confirmed on account of the impossbility
to get hold of fresh capital then will fol-
low inevitably season of real depression,
attended by the discharge Of multitudes Of
men and a shrinkage of miscellaneous buy
Ing power. Down to date this latter ele-
ment has not figured much. The great
masses Of people are still employed and
In receipt Of their wages. They do not yet
feel the pinch and are buying with entire
absence of apprehension. Their income
has not suffered, and they refuse to be-
lieve that the country Is in any danger Of
a backset or that the time will ever come
when they may be shortened in their
ability to buy what they need. or think they
need, either in the way of necessities or
Injuries. This Is the story heard every
where. Should the actual curtailment in
the borrowing Of money, which is known
to the banks and trust companies, be con-
tinued awhile there may follow auto
matte accumulation which will give relief,
at at the present time the situation is full
of doubt.
To add to the complexities we are about
Congress will meet in less
than three months and the interval is GER
tain to be enlivened by a swelling volume
of tariff revision talk. There is not the
slightest probability of actual revision for
a good while. but discussion Of the question
is disconcertlng and diSqueting. The
only thing that is certain is that
tariff agitation, preliminary to revision.
cannot be helpful to industrial stocks
or to the manufacturing situation.
Even though nothing come of the talkee-
talkee, people will become filled with more
or less alarm and the tendency will be to
get out of securities which may be i'm
paired in selling value whose income
bearing qualities may be reduced. This Is
the one thing which is uppermost in the
minds of those who are intrusted with the
of the great manufacturing
They make no concea!ment Of
their approximations in the matter and are
putting themselves in shape to stand the
storm.
The New York city forty million bond
sale, SO widely heralded as being a phe-
nomenal success, just narrowly escapes
characterization as a failure. Two or three
big syndicates got in saving bids for the
full amount just above par in order to
protect the general situation against the
black eye Of possible complete failure but
the fact remains that the issue did not go
as hoped for. The credit of Americas
metropolis is not what it should be- 1t is
an extravagantly mismanaged municipality
and Is being robbed right and left. Graft
prevails in every department and not more
than one-third to one-half in actual value
Is given for all the enormous sums of
money spent by the corrupt rings and
cliQues that honeycomb the administra-
ton. This Is a fact known to everybody,
and 1t is a fact which Is destructive to the
citys credit in all quarters. On the sur
face the new AZ per cent city bonds are
an attractive investment, and as they can
be used to advantage by trust companies,
insurance companies and estates they will
be absorbed and In time largely
disappear from the public market, but the
deal Is not one that can be pointed to with
pride or that can be held up as an H.
luStratiOn of present financial strength mr.