The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1907-01-26
WALL STREET NOTES
Market Shows Decline When
PrOfit-taking Begins.
SECRETARY SHAW IS FEARED
Should Special Deposits he with
drawn, Stringency Would Follow,
Say Bankers - Canadian Pacific
Shows weakness without satIsfac-
tory ExpIanatiOn-Readin Down.

New York. Jan. 25.-For several days
past a great many traders have been ex-
Apressing the opinion that the market
would go up two OF three points more on
the short interest and that on the rise
profits should be taken by those who were
lucky enough to have them, because a big
decline was sure TO follow This implied
that operators who were really bearish
were for the time being committed TO the
bull side, and that a very little change in
the tone of the market would send them
where they belonged. They hoped for an
opportunity 10 get out and instead they
got the ''freeZe-Out"
/ II would seem as if the short interest
in the market has not been very large re-
/ Gently. The shorts covered at the end of
/ last OF the beginning Of the present week.
on the general idea that the trouble scare
had been rather oyerworked, and for the
| same reason they turned to the bull side
! temporarily in the hope of making d
quick turn before selling again TO stay
short forever"
But the market did not act according TO
/ programme. The expected sharp rise did
not materialize, and when profit taking
was attempted prices eased off until no
profits were left 1t takes little in the
way of decline TO send an operator who Is
bullish for only d point or two over TO
the other side OF the market, and the
bulls ind il more TO their advantage
| TO have him where he can be forced
/ into buying on a rise than where
he can interfere with their operations by
| selling on the advance.
The ostensible reason for the decline in
the market to-day was the report that
/ Secretary Shaw had apparently decided TO
withdraw the special deposits from the
banks so that he might leave a clean
from office on March 1, but the real rea-
son could probably be found in the fact
that the technical position did not favor
operations on the side of an advance.
! Few bankers believe that Mr.. Shaw will
withdraw the deposits If il should appear
that by doing so he would cause recur-
/ renee Of the conditions Of stringency that
were relieved by the various measures
adopted by the Treasury Department in
the past year The general opinion is
that the withdrawal Of all special de-
pOsits would cause great inconvenience
/ to put ii mildly-as the greater part Of the
money has drifted toward this center and
( practically the full brunt Of the contrac-
/ ton in the amount OF available funds
would have TO be borne by Wall street
/ II it was known definitely that the Sec
rotary would withdraw the Treasury
funds without regard TO the possible con
/ sequences. Wall street would be filled
with Serious apprehensions as to the fu-
ture Of the money market, but in banking
/ quarters confidence IS expressed that moth
/ ing drastic Will be done. and that the
Treasury will merely pursue a policy
/ based upon conditions as they may shape
! themselves in the future. one thing is
/ certain-aIl the money Will not be called
/ In at once.
Apparently London attached Importance
to the reports of the alleged attitude of
/ the Secretary Of the Treasury. for il sent
over some rather good selling orders at
I the opening Of our market, while on the
/ London Stock Exchange Americans were
heavy throughout the day, notwithstand-
! ing that fair strength was shown in other
departments. The foreign selling was not
confined to one or two issues. but was
pretty well distributed, indicating that it
was not caused by anything bearing espe-
clally on particular stocks by a circum-
stance that was Of widespread influence.
Such the rumored intention Of the Treas
ury undoubtedly was, an5 while particular
reasons We're given in individual cases,
/ the best opinion was that the whole sell
/ ing movement was due TO the distorted re-
ports Of what the Treasury intended to do.
/ As a leader in the decline Canadian
/ Pacific was conspicuous for the weakness
/ in this issue, but no satisfactory expIana-
/ ton was heard, for. although there were
/ several rumOTs, none Of them was en-
/ titled to much consideration. One of
/ these was that the traders were raiding
| the stock; another that at the London
/ settlement next week. steps might be
/ taken to discourage the speculation that
/ has been carried on in Canadians through
/ that city by New York spectators, while
a third said that the operators who
/ caused the decline In Reading on Monday
/ last, by which they forced out weak
/ bull account Of some proportions. had
/ begun a similar campaign in Canadian
/ Pacific with a similar purpose
Had the selling of Canadian Pacific &C
CURED a day or two ago it might have
/ been explained in part as the result Of
/ preparations 20 make the final payment
/ on the new stock offers to stockholders
/ last year. but as stock sold to-day will
not be paid for until tomorrow, such an
explanation will not hold under present
/ circumstances.
Liquidation by tired holders was the ex-
PLANTATION Of the weakness in Reading that
/ seemed to meet with popular acceptance.
but If holders get tired when they see an
advance within week of about points
/ from the low level. they can hardly be
considered desirable company on the bull
/ side. For a successful bull movement
/ il is necessary TO have holders who stick,
and very few Of the other kind At the
start OF the rise in Reading there was too
much Of the argument that as the stock
had often recovered rapidly before it was
/ likely to do so again. Buying based upon
such an argument is the merest kind Of
gambling. Those who gambled in this
way would just as freely take the other
side in the game, and whether they won
or lost could not be matter of real mar
ket significance The market will proba-
bly, be all the better when they ar, out
of it.
To two items of news the traders at
tached some importance as bearish fac
tors-one the announcement that the at
torney general Of Minnesota had begun
suit to annul the charter of the ST. Paul
I Rff~-o,-,,i:-