New-York tribune., 1907-08-26
THE WEEK IN WALL STREET.

Cawsas. cFleF among nltNInN
surances given by the, President in his address
at Provincetown that in his efforts to bring TO
justice the men responsible for iawnreaklns on
the part Of great corporations he would tahe
no action which would inf1ict unmerited hard
ship upon the innocent stockholders OF the cor
porations involved or upon the great body of
investors. The utterances Of President Roose-
welt were well received in Europe, as well as
here, and tended TO allay the apprehension
rather widely felt that in his determination TO
get at the guilty he might act in partial dfsre-
gard Of the position of the innocent. That the
ultimate result of the administrations vigorous
policy in dealing with corporate offenders VIII
be 10 establish the principle that honest ana
law-observing and aboveboard management
of corporations Is best for the corporations
themselves and 10 make more secure the posi-
ton of all investors in the securities OF corpora
tions nobody doubts.
The worldwide stringency in money con-
tinues. and can be cured only by a curtallInent
of the excessive business and speculative ac-
riviry which has been its cause, indications OF
the beginning of this necessary slowing down
being plentiful in this and other countries Ilne
money rates at this centre have Of late been
extremely high with funds in scanty supply, the
banks having adopted the safe policy OF fortl-
fvjre their cash reserves in anticipation Of the
annual demand from the interior Tor money
for moving the crops and of the needs of 1ner-
camille customers for accommodation in handing
their fall business The banks have been Will
ing TO put out their money on call such loans
being equivalent TO cash; but the stock market
liquidation has been so extensive and fne spec
ulatiye operations have become so restricted
that call money rates have for weeks been al
most nominal The crops give every promise % oL
being bounteous, although not OF the bumper
sort and the amount OF money neeQeO IoI Adl =
vesting them is expected to be about as large
as in former years. while the banks of the IN
terror are SO nearly loaned up, as result OIL
the industrial activity OF the country that they
are probably not in a position 10 90 lhuCh III
financing the movement Of the crops.
The announcement by the Secretary OF the
TDreas,rZ- Iast week of his intention to deposit
in banks in different parts OF the C4Aleo
large amounts OF government moneys MGC1'
for FIVE or more weeks TO come mas Hau
highly beneficial effect, assuring as It does the
- ,tI;eb7,ent of an approximate balance be-
tween outgo of cash to the harvest heIds anu
inflow from the Treasury. In former year INC '-o
Treasury has come TO the reilet OF tue lhoi.es
market in the fall but not until the sItud'oil
had become acute; and the relief then ailoIueu i
has consisted in pouring into the iIidrhet q "se ~
lun1p sum- the receipt OF which mas causeo a44
artificial ease which has stimulated an uhWa4
ranted stock market speculation anu no, i4e
worked in the direction OF GOLD exports o"iHe
20 tho drastic liuuidation which has been go!NS
ar, in stocks with its resultant heavy reouc'loh
of loans the position of the assoclatea paIhs pah
of this city is now sucn as 10 hdA0 II '
that with the assistance OF the uepos4'e " On,
ted from Washington, they will be apIe thlS
+.1i +o afford 4 measure of accommodation large
enough to prevent anything like catasuoPlle 10
business That there will be Individual Dusl-
ness failures is highly probable, ano' IN 1dC..
inevita bile: but with a general recoSIHIol va
~ ;,,,,arattye necessity for moderation or
the Industrial and mercantile pace there seems
no reason TO fear that the country IS soon asei
n see the dreaded spectacle of nard times me
valuable summary issued a rev Gays dso pJ
+ba Corornercial National Bank Of Chicago or
the result of its inquiries from thirty thousand
observers throughout the United states as To
the business and financial outlook connTinS Ihe
Judgment reached by well informed nnanclers
here that underlying conditions are sood anu
that thA credit situation is sound. although the
demands of legitimate business VIII continue
for some time to come to absorb all aVallaDle
funds An indication to which weight may Wen
he attached is the recent investment puylng OF
Securities which has been in the aggregate very
large and which reflects the beneE OF gredt
body of the public in all walks OF hfe that conn
dence has not been destroyed anu Ii1t '4t0
stock market at around its present Level he's
discounted the unfavorable developments in the
business world which may be little ahead.
One OF the unpleasant occurrences Of the
week although not an unexpected one, was the
reduction Of the dividend on the preferred STOCK
of the Southern Railway Company. That the
dividend should not have been passed altogether
created an unfavorable impression. as the
amount appropriated is payable not out of cur
rent earnings but out OF earnings for the year
ended in June 1906. and the action OF the di-
TectOrS IN the IL
20 the disadvantage of the Southern, with the
course Of the Southern Pacific in withstanding
pressure for dividend disbursement although
dividends were being earned, until the property
had been placed in a thoroughly sound financial
nosition and with the action Of the Rock Island
in passing its dividends when the money was
urgently needed for the development Of the sys-
tenn The Southern is a weak road and needs
great sums for physical Improvement in order
10 increase its earning capacity. This money 1t
I,wu- -Tz-lNe~ ctr Cy1-
systems are obliged to pay exorbitant rates for
short time accommodation and when the issu-
ance OF bonds IS out of the question. The Erie.
which is IN something like the position Of the
Southern Railway with very large capitalization
and poor credit and in urgent need Of funds for
extension and improvement purposes, seems
likely to pass this week its dividends on the
second preferred and probably also the first pre-
ferred, judging by the sharp decline in the mar
ket price of those issues. Reports are In cir
culation OF coming reductions by other roads,
which within the last year or two, in The face
of the known necessity for the disbursement by
them of vast sums for improvements. have
raised their dividends. These reports may prove
well founded but the stocks at the present level
would seem to have discounted q cut of 1 and
IN some instances OF even per cent In the rate
Of dividend.
The course of the New York City adninistra-
ton in deciding to offer bonds at AZ per cent
has had disturbing effect on the bond market
in general and has greatly worried the holders
OF the f per cents, among whom are great
many savings banks, which have seen their
holdings shrink in value several points in the
last week. That the city could not obtain ad-
ditional funds at per cent however. has been
proved, and the rate Of interest which il has
been obliged to pay in its extremity is no higher
than that which a number OF other municipali-
ties of high credit, although not cities OF the
first glass In size. have found it necessary TO
grant.
The foreign exchange market in the early
part OF the week was extremely strong. the
demand rate advancing TO point dangerously
near the gold export level: and the upward ten