Evening star. [volume] (Washington, D.C.) 1854-1972, 1908-01-05

Inc HnanclaI and business history VI
1907. having been duly and properly en-
balmed in voluminous newspaper pages
of annual reports and reviews, the
field is free for attempted forecasts of
the future. And really accurate knowl-
edge of what is to take place tomor-
row is of more value than the records
OF years that have gone by. 1t is not
somuch what has taken place as what is
going to happen that interests Wall street.
Therefore. everybody is trying to figure
out the course. of prices for the next
thirty, sixty, ninety and 12o days and
then some.
The immediate future of the stock and
bond market will continue to depend upon
the development of the monetary situa-
ton. Conversational!y and actually con-
ditions in this direction are improving, but
not as fast as Wall street would have the
world believe. If there is return to nor
NAL banking conditions in New York by
the end of the current month we may
consider ourselves fortunate. Another
week will probably see the deficit in bank
Ing reserves made UP. but there Will yet
remain to be retired a great mass of
clearing house certificates. The banks
have been very secrctive as to the aggre-
gate of these certificates. which at the
1
has been scaled down probably $20,0106oo
already. and the process will continue
until the entire sum is wiped out.
X *
With the disappearance of the deficit
and the clearing house certificates the
necessity of liquidating a great mass of
securities now held by the banks and
trust companies and further scaling
down of loans will confront the market.
The banks are carrying numberlesS weak
accounts which will gradually be weeded
out as the market gets into position to
absorb the securities that are up col
lateral. The return flow of money from
the interior is not starting in as early
and as copiously as hoped for, but the
tide Is certain to move strongly ere long
With the return of confidence the money
currents will resume their natural flow,
and it is only a question of weeks when
the New York banks will have d COM
Portable and growing surplus of funds.
In order to hurry the day time rates are
maintained at high level. \ great many
millions of dollars have been loaned dur
Ing the last week for six months at d
per cent. The maintenance of this stiff
rate in the face of wholesale predictions
of easy money as early as April or May
may strike some as an INCONSISTENCY. 1t
certainly Eetokens willingness on the
part of great many people of good
credit to pay handsomely for insurance
against financial accident They do not
want to be caught unprepared, as many
of them were two months ago.
x
|, The burden of opinion among the more
experienced of the Wall street population
seems to be that permanent and strong
recovery in prices should not be ex-
pected until the cleaning up process is
completed and the compulsory liquidation
is really over. The expectation in this
quarter is that on every considerable rally
offerings by the banking interests will
be in sufficient volume to check any
bull movement under speculative leader
ship.
Meantime. as the supply of funds en-
larges there will be gradual absorption
of the better class of securities and the
bargain counters will in the course of
time be stripped. At the present writing
there is no end of spendidly attractive
bargains to be had and they, are being
picked up continuously: There is no
wild rush, but the temptation to get hold
Of safe bonds or stock on per cent
to per cent basis is irresistible.
Among the things which Wall street
would like to see during the ensuing year
is the elimination or retirement of Mr..
Hartman. = The entire financial COM
munity is giving a hearty second to the
popular motion for his eclipse. He is
marked as the Jonah of the occasion-one
Of the chief excuses for i'll feeling toward
Wall street and the hoodoo that it will
be we'll to get rid Of This desire is
daily assuming more concrete form. The
publication of the annual report of the
Union Pacific Railroad Company serves
to accentuate hostile sentiment against
Mr. Hartman. That report reveals him
more brazenly than ever before in the
a trpmpn6nonS lat
has been for years conducting gigantic
market operations on the stock exchanges
with the money and credit of corporations
intrusted to his management. 1t puts him
into the imeiight more conspicuously
than ever before as the greatest gambler
of the day. and as man who might
easil wreck the strongest corporation in
the world or the strongest combination of
corporations.
There is no disposition to underrate his
very great abilities in the legitimate up
building and development of the Union
Pacific system. In that respect he is
recognized as genius of the first order
and it is the regret of his admirers that
he had not confined his activities to that
field instead of undertaking to dominate
the arena of stock market speculation.
The annual report referred to carries the
affairs down to the end of June last leav-
ing unrevealed the occurrences since that
date. AS of June 80 it shows that during
the preceding twelve months cash sur
plus of nearly S6O.GCO,O00 had been con-
verted into floating debt of nearly
SI0,OOO,0CO thereby necessitating the is
suance Of $75OO0.O00 in new securities
The creation of this enormous liability
was due to the purchase of the stock of
other railroads to the extent of about
$132 100000, including the control of Bal
timore and Ohio and large blocks of
Atchison, New York Central ST. Paul and
Illinois Central Ground is found for
much glorification over the large profits
accruing from the original Hartman
gamble in Northern Pacific, something
like $50. 100000. Confession is made. how
ever. of shrinkage of approximately
So, 100000 in money ''reinvested" in other
stocks.
Since the last of June there has been
further terrific shrinkage in the stocks of
these companies, more than UP to the date
of the report. In Baltimore and Ohio
alone there is tigurable a loss of at
least S1j,00O.G0o. in Illinois Central at
least SS.OO0.OO0. in Atchison s., 100000 and
in New York Central not less than
81, 100000.
1t would appear, therefore, that on a
basis of current quotations Mr. Harri-
mans stupendous gambling with the
money and credit of Union Pacific shows
a heavy loss in spite of his initial win
nings in Northern Pacific and in Northern
Securities. As long as he was apparently
making moQey in his titanic gambling
plays with other peoples money and his
own he was all right, but now that the
tide had set In against him there is
growing 5jSDOSitiOn to take lxicl- hi,