Evening star., 1907-10-13
Financial News Letter

curIence OF crop movement. ana the end
OF the year gathering in Of funds the
situation would be very much brighter
Reinforce the commonplace routine con-
ditions with a growing loss of confidence
ana increasing uncertainty as to the
future and affairs take on a really bad
complexion in the stock market The
story of the week is not a pleasant one
to rehearse.
The odfous revelations in connection
with local traction affairs are very far
from being local in effect. The news
papers all over the country in printing
daily reports Of the disclosures not only
give the news. but they add to the gen.
eral sense Of suspicion of underlying rot
tenness In all corporation management.
For two years there has been a continu-
Gus story Of betrayal Of trust in large af-
fairs. and OF bad faith in the direction
OF corporations. To such an extent has
this been going on that everybody is
more or less impregnated with the idea
that corruption IL universal. This hap
PLY is very far from being the case, for
1t Is unquestionably true that majority
and Industrial business are honestly and
conscientiously managed for the benefit
OF the stockholders. and with a correct
Idea as to the relationship Of these busi-
ACoSSo " tES 0l IafRS. MIS-
management and thievery are the excep-
tions, not the rule. yet 50 large a space Ia
given to investigations and ugly dis
closures OF crookedness that the impress
sion has gained ground that nothing is
safe from the pirates of high finance.
To such an extent has this suspicion
grown that intelligent and level-headed
people are besieging Wall street with
specific inquiries, having for basis fear
that even the strongest and most con-
nr0ft ftNr,o fRfA h0
ing looted for the benefit Of insiders. In
all countries there is probably not a more
conservativeiy or more honestly handled
corporation than United States Steel. yet
and commission merchants throughout
the financial district are hourly asked
II there can be anything wrong in that
quarter. 1t Is Of common knowledge that
the books accounts and records of the
steel trust were lately subjected to q thor
ough overhauling by experts acting In
behalf Of the federal government. and
found to be clean In every respect Never
theless widespread Is the fear OF all cor
poration managements that there has
been more or less recent liquidation of
the shares Of this exceptionally clean
company by people who were the victims
of 2roundless apprehensions growing out
of exposures Of mtsmanagement, or worse
Is mentioned in this connection, because 1t
Is typical of the very finest and best man
aged among corporations. Nothing Is ex-
empt from scrutiny at this time. or free
from suspicion. The positive certainty of
a year or more Of acute political agita-
ton, and of Industrial depression adds to
the uneasiness. and makes it harder for
the business interests to get along.
This unpleasant condition finds re-
fection in a steadily tightening money
getting hold Of funds for any purpose
whatsoever. There is a growing tendency
to discriminate against speculation and
against individuals and interests which
may be unsafely extended Mention was
made in last weeks letter about a number
of important individuals and combinations
which were skating on thin ice. and
whose identity was so we'll known that
there was open discussion of names and
affairs. The only new feature In this
more direct and it's sphere considerably
enlarged. The steady liquidation which |
Is in progress all over the country adds
to the burden of these overladen people
and emphasizes their dangers. The mere
fact that nothing has happened yet in
the way Of actual collapse or failure byf
no means guarantees continuous i'm
munity. and unfortunately further con-
tributes to the general dstrust instead
of restoring confidence.
The action Of the stockholders Of Union
racific in giving Mr.. Hartman an i'm
bath in Salt Lake City Is far
from being reassuring incident. MI
Hartman now stands indorsed in every |
thing he has done in the manipulation of
the stock market during his administra
ton of Union and Southern Pacific af
fairs. 1t may be proved against him that
he fagrantly misused the funds Of his
railroads for stock manipulation and for
his personal enrichment yet on the books
of his companies it Is shown that his
actions are approved. If future inquiries
should reveal that he has bought stocks
with trustees funds for his personal ac-
count and sold them back to his OWE
corporation at an advance the records
will show that it was done with the ap-
probation Of his victims. 1t is charged
by a great many people who have not yet
sued for libel that this is precisely what
Mr.. Hartman has done. II he has ac-
tually committed the offenses alleged he
is now in position to give his enemies
the laugh. All of which. while con-
ducing to Mr.. Harriman's personal COM
fort and peace of mind, is direct shot to
the moral sense Of the public, and Is even
now operating against values. The Union !
Pacific stockholders In condoning the Har-
riman management have invited serious
criticism and condemnation, the act be-
Ing done blindly and in the face of almost
universal protest. Mr.. Hartman. al
though temporarily triumphant. has add
ed immensely to his unpopuIarity in the
financial district, as we'll as throughout
the country. II he is not riding to fall |
the signs of the times are badly at fault.
To say that the bond market is rotten"
is putting 1t mildly. Anybody having |
bonds to sell Is forced to make conces- |
sions, amounting in many instances al |
most to a sacrifice The liquidation of a
round lot Of bonds, even the most active, |
results in a serious decline IL done in
open market, and at sickening recessions
from quoted prices II by private sale. At
the same time bankers are making 1t
plain to everybody that comes In con-
tact with them that preparations should
be made for hard times. These bankers
are not mealy mouthed or hesitating in
giving this advice and in enforcing 1t SO
far as lies in their power. Curtailment
Of loans Is progressing rapidly, and the
volume OF Indebtedness is being cut down.
This situation applies with greater force
in the east than in the west, where the
pinch OF approaching depression seems
to be hardly felt as yet.
There is no longer the slightest pretense
of a satisfactory incoming Of new indus
trial orders. Even the steel trust is at
last obliged to confess that its order de-
partment Is in receipt Of almost no new
business except in wire, frames and some
specialties. The industrial outlook Is
quoted confidentially in large majority
of the Industrial concerns as being forbid
bing. II the great army Of workingmen
are not yet alive to conditions 1t Is time
their eyes were being opened, for unless
a change quickly occurs the tide will
sweep them on the shores of idleness. It
is possible that the actual arrival Of hard
times may be deferred until next spring.
but in many Of the great manufacturing