The sun., 1907-04-14

| IN = uOoU OF HQuluAllOn WntCn oYerCAxe0 the
aosorDtive powers Of the market and carried
prices downward at q pace much lIvelier than
che rally from the low Of last month had been at
any timeexceptO on the day after II first became
evident that large interests had determined to
| step Into the breach and retrieve q situation in
which the bears appeared to have had every
thing their ownwsy. All the leading stocks de-
clned sharply and the only change from the
generosity downward course OF prices was q
small rally just before the CLOSE that did not
! reflect anything OF greater consequence than
| the covering over the weeks end OF a few
| speculative commitments for the decline.
One Of the most dscouraEing things about
the decline was that there did not appear to
| be any well defined reason for IL. That long
stock was supplied all through the session
almost everybody was forced to admit. and
that the support was not very good even the
| bulls could not deny. As one discouraged
| bull, said the beat thing about the market was
that the decline was limited 10 the duration
Of two hours session,
! Never did the rumOr mill work faster and
! never did It turn out a more varied product.
! There was enough and more than enough to
satisfy the most voracious bear appetite.
! Only with the quality could fault be found.
| Stories OF houses In trouble or so much weak
| ened that they would 1nd IL necessary to
| wind up their affairs and retire from busi-
ness on May 1, OF bu siness contraction. OF
! new note issues pending. Of the most drastic
/ kind of action against the Hartman lines
| and OF new socialistic tendencies In politics
! these and much more were served up for
| consumption. The rumors about the pos
| sibe retirement OF some Arms from business
we're accompanied by such circumstantiality
! OF detail as that of1ices had In some cases
/ been sublet on terms which meant con-
| siderable loss on original contracts. But
| accepting all this as entirely true 1t does not
! prove anything. for many reasons could be
found why a particular house might want
! to give up its present location. It might
want to expand. it- might want TO reduce
! expenses not necessarily to stop altogether.
| Such rumOrs did not furnish reasons for the
markets weakness.
! As a sort of auxiliary to the stories OF pros
. pective borrowing by Union Pacific it was
! rumored that Mr.. Hartman would be forced
! out of the presidency of the road. Had il
been merely said that he would resign the
! intent TO utilize the story as a bearsh argu-
/ meDt would not have been 30 clear. That
! he would be forced out conveyed an intima-
, ton of friction and was in fact an insdious
I reminder Of the stories current not very long
| ago of an alleged lack of harmony in high
! financial circles. From the reiteTatiOn of
| the rumors about a change in the presidency
! of the road whenever there is need of a reason
| to account for weakness In the stock IL is
evident that the Street regards MIR. Harri-
man as an able railroad man.
On Tuesday last American Smelling and
| Refining sold as high as 1885,. and there we're
| predictions that before the end OF the week
| the price would reach l50, which would have
involved a further rise OF ill< points. In
stead the price has since moved the other
way by Just that number OF dollars a share.
Yesterday, when the quotation, according to
| prediction, should have been 1iI points
| UP. II was Ils( or ~ points down. the stock
dropping to I2oI. and closing at only frac-
\ ttonal advance from the lowest. The rise
at the beginning OF the week was made on
| very definite. stories about an increase in the
dividend rate from per cent. to 10 per cent
| year. but as at that very time a dividend
had already been declared. aud the next
period was therefore nearly three months
OF. IL was obviously quite too early to specu-
late with any confidence upon such a con-
tinEency.
The weekly letter Of a conservative house
says Up to the middle Of January the bor-
rowing demand for stocks was very small.
and almost every one apparently wished to
lend them at the fair prevailing rates for
money as the easiest way OF carrying them;
while now with few exceptions there are
more borrowers than lenders OF most stocks,
and quite a number OF stocks are very scarce.
while a great numbeI Of the usual lenders
have sold out and have no stocks TO lend.
We would be the last to argue that an existing
short interest s a reason for buying stocks:
nine times out OF ten il is just the opposite
Especially is this so when there ia a cOncen-
trated short int crest in one particular stock.
No doubt many people buy in such aicsse.
having recollections OF corners and hoping
20 see one develop. but it. rarely. happens that
the sellers do not know more than the buyers
In such cases. When, however. II is the
fashion for very many Of the speculative
public to trade on the short side the above
reasoning that IL is not wise to be long Of a
scarce stock does not apply. No doubt there
are many conditions Of the market when a
widespread short interest In merely q proof
OF a widely dinused opinion that circum-
stances are not favorable to an advance.
and in a sense this ia such a period. This
feeling has no doubt kept many investors
out OF the stock market The Stock Ex-
change history OF the last month was largely
Influenced by such a feeling; but the fall
brought in very large number of outside
Investors and the floating supply OF stock
in Wall Street must be far below an average
and we therefore believe that stocks are a
purchase for a good turn on weak points"
Reasoning along somewhat similar lines to
those followed above in regard to the signih-
canoe OF a short interest the ira ders have come
to regard the decline In the speculative quo
tations for copper as something that should
while the speculation on tho Metal Exchange
Ia confined to a comparatively few people
and these neither very rich nor influential
almost every one OF them is identified with
some branch or the metal trade. and to this
extent view conditions from within while
the best front is still presented to the out
slider Their operations in copper really
amount to glmbling, since none OF the real
metal ever passes in their trades. but II is
gambling with marked cards, since there IL
sufficient acaua intance with some line OF In
dustry into which the metal enters to aid
them very materially toward winning the
game. They may Of course misiudge con-
ditions but they should be better able to form
a correct opinion than those having no trade
connection at all That the traders now
reason in this way does not mean that they
have come to the conclusion that copper
prices are going TO break, but IL does mean
that they are no longer as confident OF the |
maintenance OF the present asking prices of
the selling agencies as they were few days
ago. .
A very pathetic story is told around the |
Street about a bear who made slOO,O 900 on the |
break in the market a month ago but has not |
vet come into the enjoyment Of his profit |
In this cruel world. where bearish efforts !
are not appreciated the troubles OF this I'M
fortunate Individual have not even won him !
sympathy. The story y that one of tha !
operators who gained a certain notOriety /
on the shors side OF tiAs market last month |
has been unable to collect his profits from !
a 'house-never a very strong one--in which |
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