Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-12-29
Financial News Letter
BY w. G. NICHOLAS.
NEW YORK. December %, 1907

~ CT " DC lidIO III duOHS the large GILES
OF the country. is the last to recover.
That is largely because New York is the
chief reserve city, and nearly every bank
of consequence in the western hemisphere
kept balances here which have been drawn
upon steadily and relentlessly to meet in
terror home demands. Neither the we'll
being nor the comfort of the New York
banks was consulted. From start to fin
ish the New York institutions have been
up against it. Not only have they been
called on to face their own troubles and
to shoulder part of the burdens of the
rest Of the country, but they have been
made the target for the indiscriminate
abuse and criticism. much Of which was
uncalled for and not a little Of which was
based on ignorance and malice. Soak
Wall street. has been the slogan of
great many Of the commentators and
financial writer's, as we'll as the politicians.
Wall street, after all, Is little more than
market place. and for the last six months
It's prices have been more truly governed
by the laws Of supply and demand than
any commodity market in the world.
There has been continuous pressure of
securities and the course of prices has
followed downward trend, just as would
have been the case in hay market. or
an egg market, or butter market where
there was an oversupply of merchandise
and an undersupply of buyers. The chief
difference when the facts and the philos-
ophy are subjected to an analysis is one
of size The New York securities market
is bigger than any other market in the
United States, but the same laws govern
price movements as in the smallest of
markets, except that in those of lesser i'm
portance and smaller size manipulation is
relatively easier Manipulation and sharp
practice are quite as likely to prevail in
the poultry market of Podunk as on the
stock exchange of New York. The latter
pays the penalty of greatness by being
shot at more frequently and with guns of
larger caliber. Furthermore, a slump in
the prices Of securities on the New York
stock exchange hurts millions of people,
whereas a slump in Podunk poultry in
jures only few. At the present writing
the entire body polite is suffering from
the blows which have been mercilessly
directed against the country's chief nerve
center. Normal conditions must return
to this much belabored nerve center be-
fore the rest Of the country can be re-
stored to health.
Now as for the last two months the
money market Is the issue of most vital
consequence. AS the clouds lift and the
scene becomes more distinctly visible peo-
pie discover with something like a shock
that the financial situation was more
critical than they were able to appreciate
during the season of greatest Langer. The
whole country Is still suffering from the
bruises which were inflicted during the
extremity of battle. but these bruises are
the aches and griefs are from wounds
given weeks ago. The patient is not yet
able to get out of bed. but he can turn
over and move his hands and feet. The
surgeons are even beginning to take off
the bandages and remove splints and
other month the patient can sit up and
perhaps hobble around bit. BY that
time the banks of the country may begin
to do business again and commence the
extension Of legitimate credits. From
most of the cities and large towns word
Is received hourly that they are ready to
resume whenever New York is. Indeed,
there is disposition on the part Of the
outside bankers and business men to
rub it into New York because it is so slow
In giving the word. The fact is not lost
sight of, however, that before New York
can safely throw wide open the doors 1t
must wipe out deficit of $3O,0O0OOO in
the legal reserves and efface $S5, 0OO, 600
in clearing house certificates. That must
be done before the New York banks can
start from safe base line. More than
that. 1t Is of knowledge hereabouts that
the government at Washington Is scrap
ing the bottom of its till and will have
to call upon the banks for money with
which to pay current bills. Large sums
will be needed around about the first of
the year, and treasury reports show the
smallest working balance that the govern
ment has had in many years less in
reality than s1O,OOOOGo. 1t will be seen,
therefore. that the New York banks are
not yet out of the woods. although they
are in sight of the open country and will
be in a. free position in another thirty
days. I
The January disbursements will be
record-breaking in volume. closely hug
ging $20O,OOOOOO. That will help a good
deal. There mas been considerable cut
ting, but the pairing down in that direction
will not seriously begin until the first
and second quarters of 1908 Earnings
for 1907 were not momentously reduced
until a month ago or Whereabouts The
figures from now on will tell a different
story. 1t is urged earnestly by the hope
full ones that the great decline which has
taken place in stocks ana bonds repre-
sents the full discounting of all that
species of misfortune. 1t will be we'll II
this hopeful view finds fulfillment in the
ment holds to the opinion that. although
there has been a terrific slaughter in
prices, the market cannot stand against
realization. and that when revenues begin
actually to fade away there will come
another break in quotations
This has been about as blue a holiday
season as Wall street has seen since 1898
Practically everybody has been hurt and
there is no pretence at concealing the
fact. The Christmas and New Year dis
to Zero There was very little to pass
around in the way of Goodwill offerings.
a reduction of 5000 OOO. 900 to $4,000, OOO,-
600 in the selling value Of stocks and
bonds In a single year left Wall street
PROSTATE. The loss did not fall on Wall
street alone. but the population in and
Immediately dependent upon Wall street
was hardest hit. More than one million
stockholders and bondholders scattered
throughout the rest of the country are
fellow-sufferers, but there is no such con-
centration of punishment as here.
Those having the financial management
or the railroads, most of whom have
headquarters in lower Manhattan Island
or have close affiliations there, have the
same story to tell of gloomy prospects.
Almost without exception they report SEN
sational falling Of in traffic, with &C
companying reduction in earnings. AL
changed into dearth Of business, and
there is not a road in the country. that
has not large numbers of idle cars. Cuts
and threatened cuts in rates give warn
ing Of the coming struggle for traffic.
Tens of thousands of men are being laid
Off and the outlook for the first quarter
of the coming year Is about as bad as
can be. There are some who claim that
the situation is being made purposely bad
for political effect upon Congress and
legislatures. This theory Is on a par
with visions of conspiraces to destroy
thousands Of millions of dollars for OBJ
ject lessns. In real life people are not in
the habit of running themselves to educate
politicians and magazine writer's.
Wall street is quick to hear of develop
ments in the current financing of rail-
roads. 1t is hearing a good deal these
days of delays in the payment of contract
work and m Waterfalls uSed in the carving