The evening star and Newark advertiser. [volume] (Newark, N.J.) 1907-1908, 1907-08-31
WEAKNESS
in LOCAL
MARKET
New York Situation Affects
Values of Traction Stocks
in This Section.
LOCAL MONEY IS TIGHT
Manufacturers Unable to Obtain
All They Want for Business
Purposes Sc Banks Restrict.
ing Loans Sc Borrowing
From NY. Institutions.
LOCAL MONEY IS TIGHT

From N Y. Institutions.
Local securities continued weaker in
the market this week, bonds of the
trolley, electric light and gas COM
panies sustaining a loss of one and
two points. Brokers and holders of
securities had hoped there would be a
rally from the loss of two and three
points last week, but the week opened
with very light bidding and the finan-
cial troubles of the marlborough Com
pany in New York weakened market
values of local traction securities. The
effect of this was a depression of values
all along the line. the bidding for insur-
ance and bank stocks showing a de-
cline as well as the electric and gas
bonds.
The weakness in the market is at
tributed by investment brokers and
financiers to the unusual scarcity of
early money, the depressed conditions
in steam railroads and other securities
handled on the New York Stock Ex-
change, and the opinion that the In
terbouogh Company of New York may
go into the hands of a receiver and be
reorganized. The company made a
good profit on the subways and ele-
waited roads during the last twelve
months, but lost more than $7So,000 90 on
its surface roads. This has given in
vestors in Newark and elsewhere the
idea that traction companies are no
yet money makers. 1t is reported that
Belmont and Ryan are on the outs and
that j. p. Morgan is organizing a syn
dictate to get control of all transporta-
ton roads in New York city and Brook
Ign. These troubles have caused 8
lack of confidence in investors in trac-
ton securities.
In the local market North Jersey Trac.
ton bonds sold this week at CT, white
Line" bonds at 60, Consolidated Traction
bonds at 1919 and 102 and the stock at 6S
while Newark Passenger bonds sold al
104. Public Service certificates sold dowr
to so and COLI. but there was no call fol
the notes. United Electric bonds sold a.
SO, Newark Gas 6s at 126; Newark Con
solidnted Gas stock at 81 and Hudson
County Ga bonds at 1001s and 101.
The above quoted prices are unusually
low for the different securities, and 10
and 1903 for Newark and Essex Count.
bonds, which brought ia to III in tn
tticti a l6N 2thA1 heOh ~ WHY NlCof
The present Is considered n profitable tim
to invest in local bonds. to hold them fc
a rise in prices. which will come whe
money gets easier.
The trouble is that people who woul
like to take Advantage OF the low price
cannot get as large loans as they want
even on gilt-edged security. from the
local banks.
Some of the latter have had to borrow
money from big New York banks in orde
to make loans to their old depositors. Thu
officers OF the New York banks made tn
loans on condition that the Newark bank
would cut down loans to business mel
and others to the lowest mount possible
Some of the local ank have called IL
loans from not only men h borrowed
for investment purposes. but also from
business men. The EVENING .STAF
man knows personally of several OF thes'
cases. and the calling of the loans ineon'
venienced the business men a great deal.
Manufacturers of jewelry generally seel
loans from banks at this time or the yea
in order to buy raw material to make Int
finished goods to be sold In October, No
vember and early In December for thu
Christmas holidays trade; They generally
get early returns for their products II
January and February, when they take
up the loans.
They are having difficulty now in gettinl
loans from local banks, that Is, all they
money continues 1T is not by any mean'
certain when they can collect from Gus
TONERS for jewelry sold TO them on credit
A firm that wanted a loan of $4,000 to use
in its business could not get more thar
$40, 900, and had to pay In interest rate
above the prevailing rate to get the money
'In every line of business the scarcity OF
money is having a depressing effect;
must now admit" said n man who ha'
been optimistic. and declared after In thu
past several weeks that conditions wer'
only temporary. II must admit that thu
trouble is that rich and poor in our com
try have been living up to their incomes
and many Of the well-to-do beyond theill
means. Men have been carrying on thef
business too much on paper, on promises
to pay, and now all begin to realize tina
pay day is coming and that "A settlement
must be made, that a showdown is caiiet
for.
ut may be a good thing for general
business when the seas are cleared, though
some wrecks may and certainly Will DC
left on the business and financial ocean
for men and corporations will know just
how they stand.
1.-THE craze for investments in real estate
and improving it has spread In all parts
of the United States and has been a power
full factor in bringing about the stringency
Of money in banks Great sums of money
have been drawn out Of banks-eyen saw
ings banks-to invest in real estate. Fancy
prices have been paid for renl estate by
spectators, who sold to people who had
cash ut q handsome profit, and now many
of the buyers have been forced to mort
gag their properties. Real estate In
growing municipalities and villages is a
Investment, but we eau have toe
much of a good thing, as was proved by
the panic of 1873, which was caused by
real estate prices being doomed far beyond
true values"
individual business men-merchants and
manufacturers-snd companies and cor
porations. hou practise economy in borr
rowing money this winter In order to helr
make money easier. I do not look fol
much relief from Secretary Cortelyou's
plan to loan from the United states Treas
ury 20 the national banks 20.0OO,OW for
Wall Street. / am confident, will soon get
the bulk of that money. and Il hundred
times that sum is needed now, because no
money stringency is almost as bad in Eu-
rope as It Is here. The short term notes
for millions upon millions of dollars at {
to 7 per cent. interest will have to be
renewed If money does not become plenty
next Menr AL hanks In the L-nltnd EtaLes