The Washington herald., 1907-02-11

week the stock market evinced a frmer
undertoue than it had done previously
and afforded numberless indications of
the kind that are usually thought In
speculative circles in Wall street to have
a good deal of significance that it was in
d state that habituaI operators in stocks
described as a sold ont" condition
The drives made against the market
were Of continually diminishing force.
and each time that they were made re-
suited in causing a smaller and smaller
degree Of liquidation. There was "a visible
reaction I'm progress from the malicious
and for the most part wholly unfounded
stories Of financial trouble as a result
of the recent decline in prices. fading
away of the preposterous Japanese war
scare, and "a general feeling that the pessi-
mistic sentiment regarding the market
had been carried TO extremes.
1t was observed that the money sitUa-
ton, II it had not absolutely ceased 10
be a source Of concern. had yet become
so much better as to make it perfectly
manifest that for several weeks to come,
at least, the price of financial accommo-
dalton would be relatively low Indeed,
many of our leading bankers. speaking
privately, did not hesitate 20 venture it rs
their opinion that nothing Ike stringency
in the call and time money markets
would be again experienced until the fan
OF the year. 0nd they did not regard il as
matter Of any certainty that such
strinsency would be felt even at such
time
ii was plain that there was a growing
belief on the other side of the Atlantic
that the estimates there of the amount of
money owing on balance by American
firms 20 foreign creditors had been placed
altogether too high while on this point
bankers of the first class in our own
country were quite agreed that whatever
such Indebtedness was at one time last
year. IL had been So heavily reduced by
shipments of merchandise and by other
natural diminutious as 10 stand at the
present time ut relatively inconsiderable
figures from a Wall street point of view.
Building Operations Overdone.
The bullion from the South African
mines has kept on flowing SO freely into
the London market that the Bank OF
England, for its part, has been enabled
to so Te-enforce its gold holdings that
these now stand at much larger total
than is customary at this time of the
year, and there is little doubt that were il
not for the fear that large exports of
gold might be made from London 10 this
country the Bank of England would I'M
mediately reduce its rate Of discount
It is undeuiable, of course that the
cold weather and the snowstOrms In the
Northwestern part OF the country have
Interfered with railway business there
in a way that they had not done for
many years past, and that the effect of
this viii be witnessed i'm January and
February earnings statements. and yes
there are not wanting those who main
tain that the colder weather In general
that has been felt over the country ia
recent weeks has done more good than
harm. What these critics have in mind
is that the occurrence ut last of a normal
winter season has contributed toward a
healthier and much desired moderation
in the general pace of business. Last
winter ana to- "a greater or less extent
during tine winter before. building opera
tons in ile land went ON almost as
uaintgrrupfcdly as I'm the summer time.
Il is very acutely debated question ia
high circles at the moment whether there
has not been during recent years some
thing like an ovcrextension of building
operations iu the country. of the same
essential sort as that Witnessed in specu-
la.iou in real estate.
20 Improvement in Bond Market.
There is no question that stocks are
cheap, chat is. that they are selling at a
level that should logically tempt pur-
chasas by investors. But such purchases
have not been numerous in recent weeks,
Eor were they particularly in evidence
in the recovery of the market that has
taken place in the last few business days
Our bankers say chat while they look T.
see somewhat lower time money rates
quoted in the near future than those
which now prevail, ard that while the
Eish interest bearing short-term note
issues placed by the great railroad COM
Uaaies are readily sold, the bond market
shows 100 percepuble Improvement and
this they do not like
Bonds and stocks are admittedly out
of fashion with investors at the moment
and the sentiment I'm high quarters APP
pears 10 DE taaJ il would be wise 10 de
lay any great speculation for the rise
in securities until bonds and stocks come
into fashion once more. il must be
apparent 20 every careful observer Of
conditions in the security market that
other causes have been at work recently
for the decline in market values aside
from those of attacks upon the market
by spectators for the fan and of an
entirely justified impression on the part
of holders of stocks and of prospective
buyers OF them that there was too
great disparity between the dividend
Weld of these securities and the rate Of
interest to be obtained for the use of
money in the open market
Permancncy of Railway Dividends.
At the close of the week before last
many of the standard stocks bought and
sold in Wall street were selling upon the
basis Of a dividend return Of between
3 and per cent This obviously iessened
the force of the argument heretofore
brought against the market with REFER
ence TO the discrepancy between the in
terest yield on stocks and the current
rates for money for long periods StHl
the lowered prices and the consequent
promise of larger dividends did not allure
investment buying. and fl was plain that
full account had not been taken Of al
,he factors bearing upon the situation
What were these additional influences .
They may he an summed up in the state
mcat that there has very prominently
figured i'm peoples minds. even If there
has been no very emphatic outward cx-
preston OF il, doubt raised as TO the
pCrmauency of these railway dividends
themselves on the basis on which they
have been recently established
Our railway companies at the present
I'm a an TrnF hr1rtr