The Birmingham age-herald., 1907-03-17
Adjustment of Prices,

During the past few months prices of
 stocks have been adjusting themselves to
 the rates for money. It cannot be eX-
 pected that stocks will sell on a per
 cent basis on a 6 per cent money market.
 Some months ago 1t was believed that
 money would be easier after the turn of | the year, but such has not been the case. | We had a short period of easier money but rates are again tightening, not only | here but abroad. The heavy selling of | stocks this week, following the enormous | liquidation of the week before, has been | due almost directly to the condition of | the foreign money markets Rates are | again going up abroad, and there seems | to be no hope for the moment for cheap | money. This readjustment of security 1 prices to money prices is a very painful | process, but it seems that it must be gone | through with. Violent setbacks in Wall | street, such as has been seen in the past | two months, usually are the signals for | setbacks in the general business of the | country Just now reports from all the | great industries are highly optimistic,
 much more so than they have been in
 many years during a period of security | liquidation. It may be that there will | be no serious setback in the business of | the country.
 But if the railways cannot raise funds | for improvements on advantageous terms | there can be no question that they will l seriously cut down their orders for ma l terials. In this connection it must be
 remembered that about one-half of the | entire steel product in this country Is | taken by the railways in normal times. l The effect four years ago of drastic | curtaiment of railway orders for steel | rails was slump in the steel business | that, had 1t gone much further, would ! have wrecked the steel corporation. Rail ha hir through | out the country are curtaling their plans l for large expenditures for improvements and extensions and it may be asserted | with authority that this will be their policy until they can raise new capital | on more advantageous terms. If the rail way policy of curtailment keeps up for l any length of time it will undoubtedly l have its effect on other industries be- | cause all our great industries are CO., | related. Each one depends on the others. Wall street has a habit of guaging it's | opinion of events by what the market | does. If We had had a violent rise in l the market earlier in the week, following | the visit of MT. Morgan to the White | House, then Wall street would have said | that Mir. Morgan's visit was very bullish. | But when stocks declined violently the | denizens of Wall street shook their heads and said things were in bad condition when great financiers had to go to the l President to ask for quarter. Wall street always wants to blame somebody or | something for things that happen and | it seizes upon the first thing at hand. | It is a habit we have In this country of | blaming the President of the United States for things that go wrong and prasng him for things that go right. | But still MT. Roosevelt is a great big | figure in finance at the moment. He has | been, in fact ever since he succeeded Mir. | Mckinley. Most of the Presidents larger | policies have to do with economic ques- tions that are matters of vital impor- | tance to the holders of securities.