New-York tribune., 1907-12-09
THE WEEK IN WALL STREET.

based technical conditions rather than on an
active public inquiry for securities Ihe OUT
siders were asked to buy at advancing NaIueS'
but except In the case of investment purchases
there was no indication of a disposition on their
part to accumulate speculative lines on borrowed
money and indication In the character Oh
trading that the rally represented anything be-
yond a reaction incident to the recent depreS-
sion The market had been oversold, and II was
therefore ripe for a movement in the other ol-
rection on the slightest evidence OF changing
conditions in the financial situation but the pet
terment in the money market did not warrant
an active participation in speculation by inter-
ests whose means were not great enough TO ad-
nit of the outright purchase of securities In
view of the various uncertainties in the busi-
ness, financial and political outlook 1t does not
appear probable that a sustained bull move
rlent can be engineered successfully at TINS
time, though further gains may be recorded IN
quotations before materially lower values are
established, while the fact remains that prices,
in spite OF the appreciation that already has
taken place. are attractive for genuine invest
ment buying. The advance from the low point
of the year has carried quotations up from 10
to 90 per cent among the leading issues. The
movement has been accompanied by the elimi-
nation of a big short interest, which again has
placed the market in a vulnerable position for
operators who believe the best speculative profits
are to be made on the bear account 1t there
fore may be assumed that unless the larger
financial interests extend their support 10 q
further degree than that already noted the long
side will not be particularly safe for the small
marginal traders. particularly as any great eX-
tension in bull commitments Will be followed by
higher rates for money.
The advance last week enabled the liquidation
of important accounts that had been taken over
at the cheap figures Of the November market
and for that reason was encouraged by the
financial element, which was extremely ANXIOUS
to tighten its forced burdens. The shorts were
Had IN bpc2uSn he
sold 10 standstill and because the majority OF
the operators in the Street, including the asso-
ciated interests that came to the rescue OF spec
ulators in the recent financial upheaval found
the time favorable for an upward movement
upon which they could reap The reward Of their
ability to buy securities at cheaper prices. The
market was practically shaped in the interest OF
people who had stocks TO sell, and the advance
merely represented the aftermath OF the decline
If the market is to follow precedent the ad-
vance may run little further and then be sue
ceeded by q decline carrying quotations to the
low points of the panic period, and, based solely
on speculative considerations, movement on
these lines according to some observers, should
be recorded in the of the next few months
1t is dangerous affair. however, to base trans
actions in the stock market wholly on precedent
and it may prove especially dangerous at this
time owing to the different nature Of the causes
that brought about recent conditions from those
responsible for other days of depression in the
of similarity between present and past condi-
tions but they not pronounced, and greater
latitude must therefore be given to all consid-
erations regarding the probable movement or
values in the next six months if not in the next
year. For the investor there Is nothing In the
current situation or in the outlook that need
uneasiness. Underlying conditions are
sound, the real value Of the majority OF securi-
ties has not been lowered and there is nothing
in the position of business money that should
AZ +la ,lofi0 nf
investment account at present prices. or on a
scale of ten points in either direction
Reaction is under way in the business world.
for which the future Of American industrial
tivities will be all the stronger. The demand
from consumers has fallen off in about every
line Of trade. The reduction in the iron. steel
and copper output has been heavy. but it does
not spell bankruptcy for the metal trade; nor
can there be found in any line of business factors
that foreshadow period of acute depression,
such as that which developed in 1893 and which
involved receiverships for large proportion of
the railroads of the country. Net and gross
earnings of the railroads showing, in many
cases a large falling off from the results Of the
same time year ago. and in some cases divi-
dends doubtless Will come down. Railroads that
in the last few years have placed their dividend
rates on extravagant levels al a time when they
were calling on the money market for enormous
sums TO finance their physical growth may have
TO make smaller disbursements to their stock
holders while the same thing may be said or
certain industrial corporations. The copper
trade already has reacted to an extent that has
compelled lower dividends, and in this branch
of the country's business recovery will, 1t is be-
lieved by copper people, come sooner than ea-
pected by the average observer, though before
IL develops the dividends on Amalgamated and
Anaconda doubtless will seek lower level At
the moment there is profit in the copper
business, but this does not mean the great cop
per industry Of the United States is in hope
lessly chaotic condition. AS to the United
States Steel Corporation the earnings of the last
two months of this year will show big reduc-
ton from the corresponding period in 1906, and
the advisabity of passing the next dividend on
the common stock may appeal to the directors
of that well managed concern The preferred
dividend, however, is not in danger and Will not
be in danger unless the iron and steel trade
should suffer from several years of disastrous
business. United States Steel preferred is one
of the most attractive industrial investments on
the list, and in the last few weeks it has been
taken in large amounts for investment account
including substantial purchases for small oper-
ators. An interesting feature of the selling at
the high prices of the last week was the liauida-
tion of odd lots in many Of the railroad shares
by buyers who took the stocks at the low points
in November and who could not resist the temp
tation to dispose of their holdings at the sub
stantial profits offered on the advance. A big
proportion, however, of the odd lots bought on
the decline will not come on the market
Time money was more freely offered last week.
there was better inquiry from the banks for
prime commercial paper at easier rates. there
were signs of a return movement of money from
the interior and a material lessening in the
premium on currency. The local banks were
able to increase their cash and reserve holdings,
and all indications pointed toward the speedy
return of normal conditions in the money mar
ket The call by the Controller of the Currency
for national bank conditions of December 3
brought to an end the heavy demands from out