Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1907-08-22
THREE BILLION
SHR|NKAGE
IN VALUE
WALL STREET STANDS
LOSS WITH 'EQUANIMITY
Those Hardest Hit Best Able
to Stand IT. Declares Henry
CIeWS in Interesting Review
of Situation.


Especial Correspondence Morning Journal
New York, Aug. live have had
another week Of general n drastic
liquidation. Since the opening of the
year there has been a shrinkage in
values estimated at approximately So
600. 900. 600. That such a tremendous
shrinkage i'm a little over seven
months could take place on the New
York stack exchange without bring
ing on panic and universal disaster Is
almost beyond belief, and had any
Prophet the foresight or the courage
to have predicted such results last De-
cember he would I'VE been treated
as a subject for the asylum. Never
theless, the fact remains true, that
Wall street has endured a shriEkage
In values far exceeding that of any
panic on record and this witho1- any
serious failures thus far. The fact
that these losses have been u
without disaster Is remarkable testl-
mony of strength in the financial sit
uation. Losses have fallen on those
best able to bear them, and the causes
are O beginning TO be clearly ua-
derstood. General excuses, such as
the oVer-eXtension Of credit, over-is-
sue Of securities and over-confidonce
have been the main and natural rea-
sons for recent reaction. OF course
with the market in a Representative
condition investors and spectators
alike are naturally more or less
frightened at the anti-corporation cru
sade. There have been some rather
indiscreet official utterances concern
ing the governments policy in prose-
cutting corporations and the anti-rail-
road feeling displayed in many OF the
states is naturally disturbing at TINS
time. Nothing, however. that the adj
m~inistlatiOn could have said or done
al this time could have checked the
recent downward movement. Liquida-
ton from natural causes was ineVit1-
Bile. II his been predicted IN these al
vices for months past as the only
means Of righting the money and se-
curity markets. Whether the cure Is
complete or not remains to be seen.
1t is doubtful II liquidation has yet
run its full course, and II not. SIN
lower prices must be anticipated; al
though we may have a fair temporary
recovery.
The remedy for corporation law
breakers Is punishment by imprtson-
ment of the guilty individuals con-
nected herewith. II the government
and state officials will announce this
as their future policy. confidence Will
at once return TO the stock market
and securities be In demand for in
Vestment. Corporations whose Officials
are found guilty should also be taxed
for all legal fees and court expenses.
Big money ines fall mostly upon in
nocent stockholders who have had
nothing whatever Ia do with he
wrong acts. hence big fines as a pen
atty depreciate values as they threaten
conhscation, while Imprisonment IN
place thereof. will advance them, as "
puts them on a more reliable ana
honest basis.
Rates for time money are stlll very
high. and a further contraction ln
speculative loans seems imminent.
Very soon the demands Of the interior
for -crop-moving purposes Will assert
themselves. The crop movement thl5
year IS late, but these demands must
De faced Just the same. The advance
i'm the Bank of England rate TO =
per cent is a symptom or conditions
on he other side. and a warning thlt
we cannot Expect the help IN una
quarter We have obtained the last
two or three years. Stringency IL
money H. worldwide for the same red-
sons tina exist here: and liquidation
has been more drastic in the united
states because speculation n over
doing have been carried TO greater
excess In this country han elsewhere.
n can scarcely be imagined that inc
blow which has fallen upon Wall
street win not ultimately affect gem
eral business. with the heavy LOSSES
which have fallen upon wealthy men
and large corporations. there must
follow n sharp contraction IN new
enterprises: and improvements at on
time thought necessary will be m
definitely postponed. This inevitably
means "A lcssened demand for mater
ials and labor. Prices are already
Welding on some manufactured prod
ucis. owing to the falling off in de-
mand. and Il remains To be seen What
will be the attitude of labor " a busl-
ness reaction really sets In. There are
no Immediate indications, however OF
any general recession. Trade is stlll
active i'm the interior, and the tact
that the masses are wei employed az
good wages encourages the hope ~
a large consumptiye demand for an
the ordinary necessities of life. The
demand for the luXuries VIII. OF
course. be curtaile1, Much will de-
pend upon the fnal out-turn Of the
crops. Thus far the prospects nave
been fairly encouraging, and farmers
seem sure of profitable prices; hut
two Of our most important crops
cotton and corn-are az least NV"
weeks late. and an early frost such as
might inlict serious Injury - stu %
be regarded as "A Of the POSSIBLE
Ties.
The railroad situation IS somewhat
uefrI.xiun. our roads continue to
show large gross earnings and an
abundance ~ traffic. The latter. how
ever. is n~oticeably less pressing imam
q year ago and most Of the roads are
beginning 70 seriously feel the great
increases IN expenses due 10 the re-
cent concessions made TO labor. q
ing the first six months 81 the year.
The gross earnings Of the New YORK
Central increased over 100000. or
about 2 per cent. while expenses IN
creased $4,000. 900. or over 20 per
cent. the result being that net earn
inrs fen of t2.5OO.0 600 compared with
the same half Of 1905. As n result. %
81 estimated hat the company oniA
earned about one-half OF the 3 per
cent dividend payable for the FIRST haii
year ON the Pennsylvania system
~Tass earnings Increased 100000
in the first six months 81 b year
but owing 10 the enormous Increase
On operating expenses. the net earn
ing increased only 2~l100.oeo. lh
view uf the Increased obligations
which the railroads have been nhliG
fu assume on account 81 new note AMI
capital issues. Do viii b. seen that the
financial outlook from the railro1N
aint ~ view "a not very satisfactolt-
TIE same forces are ~ work Dr. ai
rarts ~ The country. and " the profits
- these two typical railroads have
len Cd seriously threatened. aha o.