The Birmingham age-herald., 1907-06-02
STREET BEARS ARE STILL CONFIDENT Wall Street Undoubtedly Has Blues This Week ASSAULT ON N. Y. CENTRAL Bears Are Just as Enthusiastic Now as When They Were Bulls
 Only a Few Months
 Ago.
ASSAULT ON N. Y. CENTRAL
BY w. G. NICHOLAS.

New York, June 1-(Speclal.)-T mar ket has fitful declines and recoveries,
 but the spectators for the decline seem
 to be still very confident, and are making predictions of very much lower prices
 when the country begins to feel the eff fleets of turn in the commercial tide.
 The feeling of despondeney that is so
 evident all through the financial district Is difficult to analyze Wall street has the blues. Men who have been years in the street and have seen bankrupt railway properties built up into prosperous companies, shake their heads these days, great prosperity of the country, standard railway and industrial stocks are selling lower in proportion to their earning power than years ago, when Wall street was nearly thrown into a panic by the free silver campaign. Conservative interests in Wall street, who believe that prices today will seem absurdly cheap in another idle to expect that we can have any permanent rise in prices until there Is a change in public sentiment. Public com
 panies, especially the railroads, are under attack. and their securities are scorned now by many people who were anxious to buy them a year or so ago at much
 higher prices. The feeling of despondency in Wall street is in sharp contrast to the
 exuberant optimism a little while ago.
 But Wall street always overdoes things. Bull markets are always overdone, and bear markets are always overdone. The speculator who, in a bull market starts to sell stocks when their income return goes below the money rate usually runs out of capital before the turn really comes. Leading railway stocks in a big bull market often sell anywhere from 20 to 30 points-even higher-above what the money market would designate as nor nal level. These high prices are due very largely to the fact that the specula- tors for the rise clear up the floating sup ply of stocks by purchases made on their own paper profits, and deceive themselves as to the real cause of the high prices
 When the reaction comes the reverse operation takes place. Stocks then go below the normal level and become cheap CT than money, largely because the de- cline in prices impairs private fortunes, and forces the holders of stocks to throw them over. to preserve their credit. The lower stocks sell the more precarious be- comes the condition of large holders who have extended their credit on the basis of the high Drices
 The forced liquidation of owners of se- curities who can no longer protect them also induces selling by other holders who are frightened by the decline, and who prefer to stand from under until they see a change. There always comes a time In bull markets when me of large wealth begin to convert their overpriced securities into cash, knowing that they can replace them later on lower down. This was the kind of selling that started the decline in this market last winter. And there always comes time in bear markets when men of great wealth, who have kept a good part of their capital in liquid condition. realize that absolute bargains are being offered, that the ad- verse factors have been discounted and that the market is sold out-and who then go in and buy securities. This Is the kind of buying that we may expect to see in the present market before long. and this buying will mark the turn of the tide. One of the bad features about the present market is that some of the wealthiest and shrewdest capitalists in the country misjudged public sentiments this winter, and refused to believe that a big decline in the market was possible. It is a matter of common knowledge In the street, for example, that after Union Pacific had declined 80 from It's top price, some of the most conservative capitalists connected with the property began buy ing 1t in large blocks, believing that the reaction had run its course. They entire ly misjudged the effect of the government attack on MT. Hartman and his proper ties They believed that investment buy ing in this country and abroad would pro-