Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-06-16
Financial News Letter
BY W. G.. NICHOLAS.

BY W. G.. NICHOLAS.
NEW YORK, June 10, 1907.
The Standard Oil crowd at the beginning
of the week was advising It's friends to
buy stocks, especially Union Pacific, New
York Central and Brooklyn Rapid Transit.
This advice didn't turn out very We'll The
failure of the structural iron firm of Milf
ken Bros, while not in itself an event OF
such great Importance, threw cold chill
over the market. 1t brought home to wall
street very wildly a lesson that has been
preached during the past few months con-
corning some of the evils of prosperity The
trouble with the Mi!iikens has been that
they have had too much work and not
enough capital When their business ex-
panded SO that more capital was needed
they tried to raise IT by floating bonds.
Some of the bonds were sold, but more cap
itaI was needed. Then they borrowed
money. They had TO pay high rates for the
use Of money When they tried to renew
their loans recently the banks could not &C
:ommodate them. They had TO IAN Other
business enterprises in this country are In
much the same condition. They are doing
a big business, but they are short on cap
ital. and they find that capital cannot De
raised easily now as II could year OF
two ago. Not only does money cost more
but those who have money 10 put out,
whether in stocks, bonds or notes, are dis
turbed by the general anti-cOrporation cam
paign throughout the country, ana are
afraid to put out their money except on
gilt-edged ventures. Not only in this coun-
Try but in Europe, one fact seems to stand
out very plainly, and this is that the
mechanism of business Is not equal to the
volume. There must be readJustnent.
Ths readiustment will probably come In
the curtailment % the volume of business.
-
Tie most reassuring thing that has hap
pei ed In the financial world this week Is
Gov. Hughes veto of the New York state
2-cent fare bill. The veto recalls Gov
Cleveland's veto of similar bill some
years ago aimed at the New York Elevated
railroad Wall street is pleased TO dis
cover that Gov. Hughes is man with a
will OF his own, who is not Swayed by pop
ular clamOr and that he stands for real
fair play for vested interests. AT time
when state legislatures all over the country
are passing anti-rairoad bills it IS signifi-
cant that the governor of New York state,
drspite his more or less advanced ideas
concerning government control of corpora
tons, is thoroughly opposed TO lndlscrlml-
nate attacks on property rights. In TINS
connection it may be well TO note that Mr.
Roosevelt has mace various attempts to
form political alliance with Gov Hughes
bur the governor has minated very strong
Is 10 those who have been sent TO him from
Washington that he doesn't want TO mix
a Roosevelt man, and some political OBJ
servers have idea that he is not losing
sight of the fact that Albany In the past
has been a very convenient halfway sta
ton on the road to Washington Gov
Hughes veto of the 2-cent fare bill has
won many supporters for him IN Wall
street and there is an evident tendency TO
call him . second Cleveland.
I, fsr,t alone the Wall street bankers
and sueculators who are worried by Mr.
E,nsevelt's strenuous Investigations Of the
CORPORATIONS During the past few days
the President has been called upon to listen
to some very plain talk by men OF lmpor-
lance in the country's business affairs, who
iourneyed 10 Washington for the satisfac-
ton OF personally telling him what they
thought about him and his methods. Never
since he has occupied the executive chair
las he heard such free expression of opin-
Ion II is no violation of confidence to say
that he was nightly stirred. He was told
bluntly that his policy or antagonlsm TO-
ward corporations had shaken confidence
and filled capital at home and abroad with
distrust. 1t in vain he urged that he
was not responsible for the loss of credit
complained of. which, he held. was due to
the evil practices and bad faith of Wall
street and its high hnanciers. 1t was point
ed cut that in his efforts to get at these
peOple he was missing the cupritS and
did not speedily stop sioshing around dis
aster would follow. Some of the visitors
were large merchants. They came from
the big cities OF the country.
Fortunes do not grow wild trees in
Wall street The fate OF bond syndicates
shows this Some of the younger bond
houses are feeling pretty blue. They came
into Wall street when it was like running
a mint OF your own TO be let into under
writing syndicates. Every underwriting
was a sure thing and the privilege of being
admitted into syndicates was eagerly sought
after But now there is another story 10
tell Underwriting syndicates are being
wound up at loss, and the members are
forced to take up their bonds and either
put them away else sell them al loss.
one young house made $4,000 last year
and this year hasn't made cent. The
Morgan vaults carpeted with bonds
that cannot be marketed except at a loss.
and the Morgans going to sit tight on
them until they profit They can af-
ford 10 do this where the young bond
houses cannot. Some time ago a large de-
posit0r in a big downtown bank asked one
OF the bank officials why he couldn't be
let into one of those sure-thing underwent