New-York tribune., 1907-03-04
THE WEEK IN WALL STREET.

public speculative demand for securities, either
in the share bond department. The market
for railroad bonds is extremely inactive. The
fiotation of new mortgage issues is out of the
question. and the only from which rail-
roads may secure money for the extension Of
their Improvement plans is to be found in bank
ing houses which are willing to advance funds
on railroad notes at high interest rates. As a
consequence of the public's unwillingness to buy
bonds or stocks together with the great cost of
borrowing money on their notes, many of the
railroads beginning to lay on the shelf plans
for improvements; they considering the wis
dom OF confning orders for new construction,
new rolling stock and new rails TO a limit based
on bare necessities and in order to pfset in
creased wages and dividends they are seriously
contemplating a general advance in freight
charges. In the last few years the greater num-
ber of roads in the country have increased their
capitalization by large issues Of stocks and
bonds, and in the last six months they have
been able to borrow large sums short time
notes; yet their requirements in connection with
proposed extensions and additions have not been
satisfied, and under existing conditions VIII not
be satisfied. the state of the money market and
of public sentiment being distinctly opposed to
the emission of new bonds, stocks and notes
Some further amounts may be raised on notes.
but the great cost of this form of obligation
suggests 10 careful railroad managers the ad-
visibility of postponing borrowing OF this char
acter until the position Of the financial markets
is more satisfactory.
There is no market for new securities issues
because there is no buying demand. Absence Of
demand is based on various factors, advantage
Of which has been taken by spectators TO re-
duce values on the Stock Exchange. this move
ment not only carrying quotations lower. but
forcing liquidation OF speculative accounts, and
in some cases Of investments accounts. the lat
ter representing sales TO raise funds for the
protection of speculative holdings which have
become weakened by the successive declines in
prices. Disclosures of methods employed by
men in control Of corporations beginning with
the investigation OF life insurance companies
and continuing up to the present time with the
developments of the so-called Hartman nvesti-
cation Of the last week, have weakened public
confidence in all corporations-though the greater
number of our railroad and transportation COM
panies are honestly managed-and as result
the public gradually has withdrawn from the
stock market; il has refused to finance further
issues of stocks and bonds. and, in many in
stances it has sold securities in the fear Of
general collapse of the favorable conditions upon
which the prosperity of the country depends.
Specific cases of wrongdoing have affected pub
lie sentiment TO an extent that has involved the
good name of corporations in general but the
idea that all concerns are mismanaged and that
a few men through their ambition to I'LL their
purses at the expense of the many will under
mine the country's Industrial structure viii not
remain popular for any length of time The
transportation business in this country viii be
helped by the elimination Of the rottenness
which investigators are bringing 10 the surface;
laws passed by federal and state legislatures for
the government supervision Of the conduct Of
corporations will enhance the actual value OF
securities. and the tendency OF stockholders 10
take a more active interest in the concerns
whose securities they own viii serve 10 prevent
what is popularity known the presentation to
them Of a lemon. There is more good in pres
ent day corporation management than credited
just now. our great business enterprises are
not going to pieces. railroads will not go bank
rupt and pilfering in high places viii not be-
come the rule.
a doctrine is being preached by certain men
who preside at the head of large corporations
that present conditions in the securities markets
have been brought about by the activity OF law
makers in the matter of regulating and investi-
eating corporations. This doctrine seeks to
impress upon the mind that government activ-
ity against the corporations has destroyed the
confidence Of investors. has frightened foreign
capital from this country and gradually is up
setting business conditions throughout the land
II asserts. moreover that the railroads and all
corporations should be allowed 10 handle their
business on lines adopted by directors irrespec-
tive of the rights of the shippers and consumers,
10 say nothing of the vast army Of investors
who hold railroad and industrial securities: that
corporations are above the law. and that any
attempt 10 bring a corporation within the pale
;- fFiDfnt RElf
wreck national enterprise and create panic in
money and business. A few operators I'm stocks
who keep their eyes glued to the ticker through
ont the day and dream Of brokers' blackboards
I'm their sleep believe this doctrine. but men of
common sense in the business world, and even
some SPECTATORS, know that the present situa-
ton in securities is due not to the determna-
ton Of national and state governments TO in
ves,igate our corporations and to pass laws
governing corporations, but 10 the disclosures of
rottenness unfair dealings and mismanagement
which have been brought forth by investga-
tions These disclosures have frightened the
public. The idea has grown that such conditions
viii lead to adverse developments in business
circles and public sentiment has become alarmed
because men in whom every one believed have
proved recreant to their trusts. The intrinsic
value Of investments will be conserved rather
than destroyed by the Investigations. and by the
enactment of legislation affecting corporations.
Business in this country VIII be conducted
safer basis the small man viii have equa! rights
with the big man the producer will not be able
TO take pound OF flesh from the consumer and
the railroads viii not be able TO discriminate IN
favor Of shippers who have inside influence.
Fortunately the so-called public is taking no
interest in the stock market. 1t has not been
"A factor in speculation for many months, buJ
when 1t does return To Wall Street it will be able
"a t,,.. securities AZ reasonable figures The.