The Washington herald., 1907-10-21
Recent Failure Responsible
for Hysterical Speculation.
PLUNGERS ARE SELLING SHORT
Conservative Brokers Fear COnse-
quences Of InIudicfOus Transae-
ti0ns-FinancinI Condition stead
By Improving, and Authorities
say There VIII Be No Stringency.

tHdt W al street dlQ not consider really
necessary. a firm Of stock brokers. new
10 the business and bearing q name that
has been couspicUously, II not altogether
gloriously, connected with the copper
mining industry, conceived thar II would
be- smart thing to attempt % corner
The common shares Of the United Copper
Mining Company, with whose affairs tho
firm has been prominently identified.
The effort To corner the United common
shares collapsed, as it necessarily must
have done under existing financial con-
diti0ns, and the entire stock market
passed for a time into state Of semi
panic Had the trouble been confined TO
the gambling in United Copper. very little
notice, comparatively, would have been
taken Of Il, but it was universally realized
that other and FAR larger interests were
involved than those directly concerned in
the affair and although at the close OF
the week il appeared likely that the diff
Guilty would not extend beyond the limits
that were openly circumscribed for it. and
although IL was established that the gen
eral banking position at this center was
sound and strong, nervousness IN tho
financial district over the matter was stu
apparent
The truth about the stock market IS
that for a long time it has been suffering
from q species Of hysteria, and mani
festly feelings Of this kind were not les
seued 10y the events Of the week Specu-
lators and investors alike have lost their
bearings under d food OF pessimistic ru-
mors and gossip Of every description. Al
together exaggerated estimates have been
current Is 20 the extent OF the business
reaction that is likely 20 take place in the
months TO come. and il has been tho--
oUghly demonstrated that the real trouble
in the general financial situation 40 tho
moment is not lack OF money or prospects
Of sIackeHing business, or any other dis
tnctly evil thing. but that the difficulty
is q lack OF confidence.
Brokers Taking Chances.
Houses in Wall street Of meagsr fnau-
ciaI resources are short hundreds %
thousands Of shares Of stocks. and it IS
not generally appreciated that the opera
ton Of selling stocks short does not t.
quire. like the operation Of buying stocks
for the rise. the possession OF c0usid-
cradle capital
The commission house that buys stock
for a customer has 10 pay for il OUT
right and 10 REQUIRE q corresponding de-
post of funds from its client. But the
house selling stocks that il does not
own does not have 20 pay out any money
at all. since it is enabled To deposit IS
security fer the stock borrowed for de-
livery the money received from the ssls
OF the stock itself
Those speculative firms willing 10 take
chances ia transactions of this kind ara
often willing 70 allow 'piunge-s'' who
deal with them 20 put cut lines OF stock
for the fan three or four times larger
than they would if purchases were in
volved There is in one Office in Wall
street to-day a man short Of over 1000
shares Of stock who started his opera
tions but few months ago on q margin
OF only SlG9
The instance Is typical Of a far greater
share Of current business in Wall street
than is supposed. and * bears witness
TO the enormous amount Of buying OF
stocks that must some day be made in
order to protect these commitments.
No Honey Stringeacy.
Meanwhile the financial position. strict
ly speaking. seems TO De steadily impr0v-
ing. and our best bankers are outsDoken
in the opinion that whatever may be the
troubles with which Wall street IS visited
later in the year those having reference
TO money stringency viii not be among
them The Bank of England by means Of
many prUdently directed steps has builc
its reserves up to the highest point seen
at this season during the last eleven
years. and in our own country it is e
matter that should be well known 10
everybody that in due course the funds
sent &c the West for the periodical crop
moving must return to tie large financial
ccnters and bring with them relaxing
rates for call and tine accommodation.
The general fact is becoming more and
more clear that there Is nothing essen
tally wrong or poisoned in our business
and financial life. but only our country
has in common with many other countries
of the world endeavored recently TO do
too much business and development work
In a too short space of time.
It is, of course. unfortunate that the
ownership of the railways in the West
ern and Southern sections Of the land is
the lines of the roads 70 the same extent
as il is in the New England and Middle
States. for there is little doubt that il
reverse conditions existed and the people
Of the South and West We're interested
In the railway companies local 10 them
there would be much less meddling than
there is now with the affairs % the rail-
way companies by the Southern and
Western State legislatures. And It is b
little calling FOR people I'm this neishbor-
hood, to whose money invested in rail-
way enterprises in the agricultural dis
triCts in past years the wealth of these
sections IS mainly due. to read in the
newspapers daily glowing accounts Of
Western prosperity, stories Of West
ern banks overlooking with deposits
and of demands there that the railways
shall be rebuilt and extended so as 10
accommodate the increased traffic that
offers and to see at the same time these
same Western and Southern people hound
ing the railway companies with impOs-
sible restrictions. ordering sweeping re-
ductions based on no considerations Of
equity whatever in railway freight and
passenger rates and acting generally as if
with a mania Of unreasOning
hate and passion against the railway
lines that are bearing riches TO their
doors.
The slow moving but even hand OF
natural law viii nevertheless redress the
in due time, and there are wise
people in the West who are fully aware
OF it.
Mental HeaIer's Lecture.
Mrs. seaton, a specialist in healing by