New-York tribune., 1907-12-23
THE WEEK IN WALL STREET.

-. -, act,al inxestnaent buying, while sub
stantiaI banking interests were not as ,uie
active in the speculation, save at times "lei
r.;oos ,,,der the influence of professional SELL
ing needed support 10 prevent serious deprecia-
fion Speculation was d traders aIlair, aho -
was not thought likely there would De any
change in the character of dealings III tns oai-
800 of rho wear There was nothing IN tne
course of money and business to encourage
heavy speculation for higher prices. ana even
t,a declaration of a large number or ol'loeHuS
AZ the high rates established earlier IN the year
failed to attract any public enthusiasm oNei
the market. 1t is well that the pupiio
is out of the market for the present. an
enlargement Of speculative commitments O
borrowed money at this period WouIo tellu
to postpone the time when a legltlInate
bull movement could be brought about "Iiie
II also would serve TO check the improvements
now under way in the financial situation, not
,vithstandinE the ideas to the contrary that are
entertained by few brokers who are hard up
for commissions. AS rule, the commission
houses are not advising their customers 10 puS
stocks except for investment on declines for
ouick returns and the attitude of these concerns
srJpnlies one of the couraging features or fhe
present market and suggests the well 1ounoed
theory that Wall Street firms as whole are
more interested in creating position that Will
bring future favorable results than in maTlipu-
lating the market in the hope of instant prof.
its Ii is realized in conservative circles that |
this is no time for speculative expansion
1t is wisely pointed out by the advocates
of quiet days on the Stock Exchange that
conditions established by the recent financial
panic are not the sort upon which bull specu-
lation can be safely conducted and that the
process &C readjustment must be allowed to go
on without the accompaniment of an outbreak
of speculative movements if A foundation Is 10
be made for heaIthful operations at some future
time.
With a heavy deficit in their reserves, with
Clearing House certificates outstanding to an
estimated amount of s90000,oe0 and with large
requirements TO finance the first of the new
year. the local banks are not in position TO
handle an active stock market. There is stlll
q premium currency and wide mixture OF
Influences operating against a comPrehenslFe
restoration of the resources of the New York
banks but the way is gradually opening for re-
sumption of cash payments throughout Inc
United States and for the establishment of a
real market for time money and commercial
paper. Commercial customers of the banks Will
be favored much as possible at the expense
of the speculative community and until there
has been a complete recovery of confidence in
business quarters and relief from mercantile
depression that is primarily based on monetary
stringency new ventures in the stock market
ought to be held in check, as they doubtless
will if current indications count for anything.
When the time comes for sustained bull opera
tions in securities IL will be found that an i'm
mense amount of stock has passed from speCu-
lative TO investment account, that the forced
liquidation of recent months has eliminated !
many weak spots and that there has been a big
distribution Of securities in quarters where there
will be danger OF financial disturbance.
Stocks are passing from the hands of the weak
to the safe deposit boxes of investors. refec-
ton of which is presented in the enormous in
crease in the number of holders on the trans
fer books Of every sound corporation. The Della
ware & Hudson Company, the United States
Steel Corporation, the Union Pacific, the Great
Northern. the American Locomotive Company.
the Baltimore & Ohio and the American Sugar
Refining Company are among the leaders in
this movement, the Delaware & Hudson. for in
stance having added more than fifteen hundred
new investment accounts to its books since the
financial collapse in October
Directors of many railroad companies in
maintaining dividends at the usual rates and
in some cases declaring extra dividends are
freely criticised in some quarters in view of
falling net and gross earnings, heavy note OBJ
legations coming due and the need of new
financing for the purpose Of completing ex
traordinary work and improvements. The fact.
therefore, that such companies as the New York
Central lines and the Pennsylvania willing
10 keep dividends at the current level. and in
the case OF the Pennsylvania Company which is
owned by the Pennsylvania Railroad, the Lake
Shore and the Michigan Central to make addi~
tional payments to the stockholders must be
credited 10 confidence on their part that busi
ness reaction will not reach serious proportions
and that the financial position of the properties
fully warrant such declarations. 1t may be
well to note however. that in the year about
TO close the New York Central, even with its
stocks Of subsidiary companies, has only a small
margin above dividend requirements at the rate
Of per cent, and that the Lake Shore and the
Michigan Central have not shown results which,
according to the ordinary rules of conservatism,
would warrant extra dividends If the roads were
independent properties. The New York Central
reports heavy falling off in net results for the
last quarter Of the year, well as for the twelve
months. while throughout the railroad world
the tendency is toward lower net and gross
&c haTf that he in6
of reduced earnings viii not run on for an ex-
tended time, it is contended underlying
conditions affecting our industries are sound
and will serve TO bring about quick recovery
in mercantile circles just soon as the financial
situation becomes normal. So far the business
outlook presents nothing that warrants appre-
hension over the country's industries but for a
time caution in all business undertakings may
be advisable
A noteworthy development OF the last week
that reflected the strength of financial and busi-
ness foundations in tn United States and which
revealed the source of power to attract gold
from Europe was the publication of the report
of the country's foreign commerce for the month
of November and for the eleven months of the
year. showing for the latter d total of exports
and imports to the value Of S3,047173,743, an
increase the same period in the preceding
year of $253,178,474, and an excess OF exports
10 the value of S3S5405.539. In November the
excess of exports amounted to S93,655,751, the
outward movement of merchandise in that time
being heavier than any preceding month in
the history of the land, reaching the large total
Of s204,444,S6e a gain over November, 1906. of
s21,7S9,I75- Imports also We're heavy, making
the best record for any November with the
ception of that month a year ago, from which
there was decline of sS,967,234. but the enor-
nous shipments of food products cotton and
general merchandise from the various ports of
this country made the inward movement small
in comparison. There increase in
lov,