Evening star. [volume] (Washington, D.C.) 1854-1972, 1908-06-21
Financial News Letter
BIZ ". G. NICHOLAS.
Special Correspondence Of The Star.

time. Idle capital is p1ling up at great
rate in all the fiscal centers of both
Europe and America. and interest rates
have dropped to very low levels. Yet
people who own the money are afraid to
60 into anything which has in it ele-
ments Of risk. preferring to let 1t lie idle
and unfructifyink in banks and trust
companies rather than invest II in securi-
ties. In business or In the development of
new enterprises. Hence II is that time
money in any amount can be borrowed in
London as low as per cent and six
months money in New York under 4 per
cent. Call money in London Is quoted at
y OF per cent and in New York it can
be had we'll below per cent. Banks and
trust companies in this vicinity are re-
ducing rates paid on deposits.
An instance Is related of dormant per-
sonal account of 100000 in one of the
trust companies. the possessor of which
was notified this week that the per
cent which had been allowed him would
be cut to l per cent. The big savings
banks have not as yet taken formal steps
such move is expected and must occur
unless there should be revival in bust
ness very soon which will call into legiti-
mate employment the great mass of
piling up of idle capital is the most dis
couraging feature of the general business
situation, and Is a stolid and unanswera-
BILE offset to much Of the sunshine talk
about returning prosperity.
4
The worst feature of the piling up of
idle funds is the fact that 1t affords a
standing temptation to the group of big
Wall street gamblers to use the money
for stock market manipulation. This
group by reason Of their command of
these funds in New York and London
successfully engineered a stock market
campaign which began last March and
only ended a week or two ago. They
made a gigantic killing in this cam
paign and are IN oet{e av sao =, man an
minded. Money is cheaper now than 1t
was when they began their stupendous
operations and the game might be easier
now than before.
nipulation and of the gambling instincts
of the men themselves oeters wholesale
short selling and also causes the rank and
file Of speculative bulls to cling to their
lines. This keeps the market on fairly
even keel. although the political situation
imparts to sentiment an element Of nerv-
BUSINESS which might at any time 1ncite
either slump or a sharp advance. de-
pending on the impulse which the big fell
lows might give 1t. 1t is in their power
10 lne market d. hlCh (HdI WOuiA SCiiu
prices off ten points. or a boost that
would put them up as far. A market
thus situated is not attractive to thought
full men who like to feel that their opera
tions are based on intelligent Judgment
and who like to believe that their trading
is something better than a mere gamble
dependent upon the dice shaking of mar
ket naanipulators. Those who look on the
stock market as game of chance rather
like the uncertainty What they want is
%Io1y 40 at ,oyffn Ia RI
who Is dealing the cards so long as they
think they are getting a run for their
money.
The perpetual temptation of low-priced
money available for speculation and al
ways at the hand Of the giant market
jugglers has very materially reduced the
open short interest In stocks and to that
extent weakens the technical position. A
large number Of people would like to sell
short, but are afraid to do so. having
been taught by previous experience the
danger Of selling themselves into trap.
A great multitude Of men have feeling
that prices should work off during the
next three or four, months on account of
the political uncertainties and agitations.
but they had rather sit still than run
the risk Of being gored by the big bull
gamblers.
The experience Of the last three months
is painfully fresh In their memories. AS
before stated. not even the lure of good
railroad stocks paying to per cent or
safe industrials paying to per cent is
sufficient as yet to attract from the horde
any very large sums Of investment capt.
tai Eventually this huge and growing
aggregate must get tired of idleness and
gradually find its way into securities of
the kind referred to. Political quiet and
realizing on the bountiful crop prospects
may be necessary to give capital the de-
sired impetus.
1t is yet too early to realize fully the
market effect Of the Chicago convention.
During most Of the proceedings the ebb
and flow of prices were within narrow
limits. The prevailing feeling was that
the political leaders had matters we'll in
hand and were in position to check any
Roosevelt stampede, which was tie back
eround bogy man. This was shown
Wednesday afternoon on receipt of re-
ports of the fifty minutes Roosevelt
was after the close of the stock exchange
that the news was circulated. but for an
hour or more people were running about
from Office to office trying to make pri-
vate sale of securities away under clos
ing quotations on the exchange. The
panicky impression took strong hold on
nervous people that Roosevelt would be
the nominee after all and that the coun-
try would have to go through another
four years Of his regime.
curious feature of Wall street con-
vention politics was seen in the knowing
serenity with which the population of
the financial district regarded the con-
duct of its captains Of finance, industry
and transportation in acquiescing in and
working for platform planks to which
they were known to be personally and
privately opposed. The philosophy of this
attitude was very fully understood to be
an entire Willingness to pay any price
to get rid of Roosevelt With him out
of the way It would then be pc: sible 1t
was thought, to do business with states
men who would stay hitched. Just how
the open backing accorded by Wall street
to Mr.. Taft and his inherited policies
would be received by the western farm
cussed 1t appeared to be not even
thought Of. Sufficient unto the day is
the evil thereof Sufficient unto this
day is the elimination Of supreme dis
turbing factor. Such at least seems to be
the ruling idea of Wall street. Taken all
in all the convention week aroused less
market excitement than had been antici-
pated.
The passing of dividends by two of the
subsidiary roads of the Vanderbilt sys-
tenn was the most significant news Incl
dent of the week. 1t would appear from
this development that the New York Cen