The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1907-03-18


financial district always find people I'M
prepared for them, even when Fremont
tions of their coming have been abundant,
The declines in prices in such disasters
usually run much farther than anybody
supposed they would and result iE sell
ing o. stocks by spectators strong in
resources and frightened investors who
had not imagined that any catastrophe
that was possible could force out their
holdings The notable characteristic OF
the great break in the market on We'd
nesday and Thursday of last week was.
as has been repeated a thousand times
since then, the fact that it was accom-
panied by 10 financial failures.
Il was a liquidation which if it drained
the pockets OF great many rich men
yet addressed itself TO pockets that were
so richly stored with money or with
accrued paper profits that it did not
press any one into bankruptcy. This was
the one fact that stood out most plainly
in the wreck and havoc in Wall street
at the end Of the week-that six months
decline IN prices greater than ever known
before in the same extent of time In the
countrys history and eliminating III a
sudden drop of almost unparalleled extent
did not force even a single Wall street
firm to close its doors The country
is exceedingly prosperous that can stand
such test.
It must be admitted, on the other hand,
that the declines in prices witnessed
would probably not have been as great
as they were if a few definitely unfayor-
A. a.
deed developed As the rush of Iquida-
ton in the market went on gathering
greater and greater force the fear be-
came widespread that some vast and
portentous evil thing was overshadOwing
the situation, whose ealamitous effect
upon prices when fully revealed might be
greater than any man could measure.
known as Mystery Panic.
The panic of March IS and Il. 1907. will
be known IN history as the mystery, panic,
in the famous fall in prices in May, 1901.
OF which people win always speak as the
affair Of the Northern Pacific corner,
everybody knew just what was producing
the trouble and that It was Of essen
TALLY temporary nature. Last week no
one could tell just what particular kind
of a tempest was brewing, and people In
the Wall street commission houses who
remembered standing around the stock
quotation instrument on May 9, 1901. and
seeing such an active stock as Atchison
common for instance, drop forty points
in the course OF half an hour. were not
overdesirous of doing what they knew
perfectly well they should do as a matter
"a fc Ia gaz esFr1 a n
courage and buy stocks. Some little sup
port ia the way OF investment buying
there was in the market last week. but
up to Friday this consisted mostly OF
the scattering purchases OF fractional
lots Of stocks by people of small means.
1t looks now. of course, as II the panic
period was over; but If the losses that
have been made have fallen mostly on
the shoulders of rich men, who, it is said,
are able" TO bear them, it is none the
less true that what has happened has
dealt a mighty blow to the development
of any really great and considerable buy
ing power in the market for a long
period 10 come, nor is the general imam
cial outlook at all clear. That great sup
port 10 the stock market which has been
afforded I'm the last four or five years
through pyramiding purchases of stocks
for the account of men made newly rich
has vanished It is probably true that a
very considerable portion of these men
did not sell their stocks last week, but
still possess them even as outright own
ers or as speculative holders protected
10y good margins. Nevertheless. even
these men VIII not feel ike adding to
their possession of securities under ex-
listing circumstances. 1t Will be many
days before there viii again be seen in
the security market such prices as 1s5
for Union Pacific common and go and
$40 for Northern Pacific and Great North
ern preferred.
Attributed to Hartman.
It is manifest now that the specific cause
of the recent disturbance in the market
centers around influences connected with
the activity in the railway and financial
world of Edward H. Hartman and the
great speculations in the Union Pacific
and Southern Pacific common shares in
the closing part of last summer. Through
out the year 1906 up 10 the month of
August every financial weathercock whose
trustworthiness had been attested in the
past. emphasized, as it had not done for
years before. the necessity of prudence and
caution in all financial ventures It was
evident that for a multitude Of reasons
capital in this country and all over the
world was in state of strain and that.
moreover, such strain was increasing
rather than diminishing
In our own country general business
was carried on under conditions of totally
unprecedented and continually enlarging
strenuousness. The expenses of conduct
ing business, especially in the railway
world. were so mounting up that an un-
mistakable tendency toward a diminution
of net profits could be discerned. II be.
came more and more a matter of GER
tainty that the cOuntry's crops in the fall
would be the most abundant on record
requiring "A larger withdrawal OF money
from the Eastern financial centers than
ever before experienced during a crop
moving season.
Investors Now Hesitate.
What the future stock market may dc
is beyond any mans telling, hut there
are certain things that should happen in
the near future If We are going 70 have
a market in which people can make in.
vestments with safety. In the first place
Edward II, Hartman and men like hin
in the financial world must go. TIL,
people have lost confidence once and fol-
all in the honesty and ability of thes,
men. They believe that If these men ar,
honest they have suffered themselves t
cherish such perfectly monsrous idea:
Of acquisition and domination In the rail
way world as 70 make them absolutely
unsafe persons to conduct great business
enterprises, and to result In the awar,
TO them sooner or LATER of the fate whict
is always melted out TO the NapOleOns Of
political or business life. In the second
place there must be in the business worlS
IN this country. just as in the financia
world. q relaxation and q shTinkage.