New-York tribune., 1907-10-19
GUGGENHEIH'S ANALYSIS.
BIames the Bears for Present Money
and Stock Conditions.


Daniel Guggenheim believes Tong headed bears
have been responsible for the present situation in
the stock and the money market but at the same
time attributes the state OF affairs to the banks
and brokers TO large extent. The present stage
he characteriZes IS the hySterfcal When seen
last night he said:
Primarily the present situation is due to the
money condition. I have no doubt that it was
first started by shrewd, long headed bear oper-
ators. who first sold their shares and then
sold hundreds OF thousand Of shares that they did
not own. Then the brokers found the banks crowd
ing them interest rates and reducing the
amounts they willing to lend and these bro
kers forced their customers 10 sell and the first
general reaction set in. This in turn fol-
lowed by the bears overselling the market again.
Now have the third stage. which. think,
may term the hysterical. There at the pres
eut time a large number of people who dis
posing OF their holdings just fast as they can,
regardless and without ANY thought OF the actual
value of the securities that they possess. This
dltion is being aggravated by the bear operators
spoke of. who are helping the hysteria along by
selling more and more securities.
What, in the end. will clarity the atmosphere
and settle the whole situation will in per-
haps two or three weeks at the most. Then you
will find everything entirely changed The money
that is being used for moving the crops VIII
be freed. as the crops will be the seaboard. and
with their shipment gold will be forthcoming. In
addition there is already enormous absorption
going all over the country.
In my mind there is doubt that the whole
market is very much oversold. 1 am satisfied that
Smelter common has been oversold between 125,O0O
and 10000 shares The bears reversing the
programme followed by the bulls when they pyra-
mid. They sell short and realize a profit then sell
short for double the amount. They will probably
have the same experience as the bulls. There Is
doubt that much money has been made on the
short side. but this will disappear just as the bulls
profit disappeared. 1t is very rare for sQecuator
TO take his profit and quit. He his profit and
puts out more stocks. He keeps this up until his
entire profit is eliminated
'As for the securities. I we'll satisfied that
the water has been eliminated, and not onIv the
water but a goodly proportion OF the actual value
of the securities. The present price of a greas
many securities is much below the actual valua
AS the selling of stocks keeps on and there is 20
more water to be squeezed out it is the value IT.
self that is being discounted
ut is quite true that just the present time
money is high. but it will get much cheaper with a
recession OF business. recession in business of
per cent win give all the money necessary TO th,
requirements of the country. and with that Will
come natural demand for securities l don't know
what the spectators are going to do. and one can
never tell what hysterical public will do and
therefore I cannot say whether the bottom has
been reached not. but do know that at the
present time practically all first class railroad and
industrial securities are selling away below what
in my judgment, is their real value
LAS illustration l cannot do better than to
take securities know all about. like those of the
Guggenheim Exploration Company. The latter is |
capitalized for o0oO with little S2OOOOOOO
issued. This company owns in the KlOndike valua-.
BILE placer mines from which we expect to extract !
gold the net value of least $750O0OOO This is
only one of the properties that the exploration
pany owns, but believe that it is the most val /
liable
We have been between three and five years in /
working up the property. We are carrying water |
fifty miles TO work the plant, and expect To /
take out large amount of gold next year In 1909 4
we will have it in full blast. am president of the /
company and we have all been working without /
making any charge for salary other remunera- l.
ton Just as If 1t a private enterprise.
Nevertheless Exploration stock was sold to-day :
at 12O 4 share SIS 100000 basis. whereas the /
large owners of the stockand 50 per cent is close
u, held by members of the family and a few
friends-pad 200 a share for the stock a year asA i
Again take tho Smelter stock. This sold as
high as III. To-day 1t sold at 81 The property is .
as valuable it when shares sold at III.
and in fact paying larger dividends /
than we did then. We have smelters Perth /
Amboy. Baltimore, Chicago. Omaha, Denver.
Pueblo and many other places. and / do not rec
ollect the time when the capacity of our plants
was taxed to such extent at present.
.oThe rumor mongers have been busy. however
and with those who have been selling Smelters on
the short side, have cOntended that Smelters We're |
to be investigated by the government and that
there would be prosecutions and all that sort Of
thing. Up to the present we haven't heard any
thing about the prosecutions from any reliable
source The same persons have circulated the re-
mort that we We're in the same class the copper
stock whereas our business is very different. and
has practically nothing do with the fluctuations
in the price Of metals. We do a business for /
miners throughout the world a commission 1
bass We charge a reasonable profit ton for I
melting and in many the metal is to be
rarurnad 10 the miner sold for his account
Il have gone into this matter in detail because /
l don't wish the stakeholder who is unfamiliar /
with the business and the way it is conducted to
sacrifice his securities because of a msunderstand-
ing and that Is exactly what is being done with a
large number of securities. However, when I !
spoke of absorption l had in mind the fact that /
the number holders of preferred Snelter stock (
have increased 100 per cent within the last year"
COPPER DOWN QUARTER OF A CENT.
Copper quotations on the New York Metal Ex-