The Washington herald., 1907-03-14
MARKET NEAR PANIC
Heavy Drop, but Not a Fail
ure of Wall Street Firm.
MAY 9, 1901, IS RECALLED
Principal Issues Break from Four TO
Twelve Points, Being Largest De-
cline Experienced I'm six Years.
Money Rates High and Farther Ad-
vanees Expected Before April L.

New York, MaTCn l0--lL was lhc Gun
sensus among experienced observers Of
the stock market that to-day's occur
rences on the stock exchange could not
strictly be characterized as a panic A
panic from a Wall street point Of view is
time when heavy liquidation Of stocks
takes place and it develops that there is
practically no market for the securities
that are sold.
Although the fall in the market to-day
was sensational, stocks were bought ani
sold. except, Of course, in the case Of
some of the inactive or industrial shares
at 10 more than ordinary variations IN
price between successive transactonsi
and while there was naturally more or
less apprehension concerning the unpieas-
ant effects that might follow from such
notable break in the market, and the
weakening financial strength in many dit
fe~ent quarters necessarily entailed by
such a prolonged and drastic reduction CT
market valuations as has taken place in
the last seven months, there were to-day
no failures of Wall street firms or indi-
viduals. nor were there rum0rs Of serious
trouble in any direction.
The remarkable statement could, how
ever be made that to-day the greatest
decline in stocks occurred ever known
in Wall street in one days session of the
stock exchange without causing a panic
of the traditional and orthodox charac-
ter. Prices of the standard railway
shares fell more than they have done in
any full DAYS business since the time Of
the Northern Pacific corner in May, 1901,
and this fall was the last thus far Of q
series Of declines that have altogether
carried prices down further within the
same space of time than they have ever
done before.
No Explanation of Drop.
To-day 5, market stress will, finally,
undoubtedly pass in history as a time
of trial for which no direct and definite
explanation could be offered. It seemed
10 be generally thought at the close OF
business yesterday that prices would be
depressed to-day on account of the
stringency in the money situation that
was plainly developing. It was realized
that in the natural order of events
money would tend to work closer between
row and April /, owing to the usual
forces cusromarly operating for higher
money rates during this period
II was known, too. that during the
next few days payments of many mill
lions of dollars would have 70 be made
on subscriptions TO various railway
stock and bond issues. and that there
must be a large calling in of funds for
dividend distributions. These eXigencies
to-day forced the call money rate here
as high as 10 per cent. although bank
renewals were made at a much lower
rate. Higher money was again reported
from Chicago and other Western cities,
and really tight money seemed to rule in
Boston. where the rate of interest on
call loans has for several weeks ruled
above that prevailing in other large
financial centers-
Again newspaper dispatches from
Washington this morning, although pur-
porting 20 be of reassuring character re-
garding the attitude of the government
toward corporate interests, referred u
the probability that an investigation of
the Great Northern and Northern Pa
cifc Railway companies. similar 70 that
recently made into the affairs OF the
Union Pacific Railroad Company. would
soon be undertaken by the Interstate
Commerce Commission; and there was q
general disposition evident in the dnan-
ciaI district u look forward less hope
fully 70 the prospects OF relief as the
result of any action taken by the gen
eraI government from the harmful effect
of the drastic legislation now meditated,
or actually passed, in so many different
States.
Money Situation Alarming.
Finally. the market was admittedly dis
turbcd from the very outset of business
by the clear signs that an uupleasan,
money situation was making itself felt on
the other side of the Atlantic as well as
here. a severe fan occurred yesterday
in Berlin in the price Of German govern
ment issues and investment securities
and this was coupled to-day with an ad-
vance in the discount rates in the open
market in London above the Bank OF
England rate. and drop in cousols "a
the lowest price recorded 10y them fol
over forty years.
Rumors of financial trouble were. in
fact, much more definite in Berlin ana
London to-day than they were in New
York; and. although the markets abroad
Were all better at their. close than they
were at their opening, they reflected
throughout fears of impending higher
rates for the use of funds. and led = Tho
sale here of in the neighborhood OF
50.000 shares Of stock for foreign account
Il must be admitted that all these re3-
sons were not sufficiently explanatory OF
of frr.f~e foil
the security market here to-day and thai
the lack Of full reasons for the Hquida-
ton gave to the stock market its mos
disquietins aspect. Close observers ol
the trading on the floor Of the stock ex-
change declared that all evidences fav-
ored the probability that il was actua
liquidation that was taking place. anC
that there were few, if any, indication.
Of that manipulation for the fall which
have SO long been plain.
The downward course Of the marke
was almost continuous during the frs
three hours Of business, and in this period
quotations for the principal issues brOk,
from 10 1-15 points. the declines in tn,
majority Of instances apprOximating the
larger rather than the smaller figure
IN the second hour prices recovered
little, but the rally obviously lacked
hiidpes stliu btAote Liie CIoSe aHOtner sell
ing movement set in which carried value.
70 nearly the lowest point of the day
ana in some cases. below IT,
Money Quickly Absorbed.
There were in general two comment.
that were as frequently made as any
other after the end Of the business day
in the great Wall street banking houses
one was that it was helping the situation
very little if general commercial anC
mercantile business continued 20 absorb
as it was doing, all the money that wa.