New-York tribune., 1908-06-15
THE WEEK IN WALL STREET.


ume. while price movements as a rule showed
unmportant changes fluctuations eenerahy
representing the insignificant operations OF
board room traders. Political uncertainties
naturally tended to restrict speculative deahllss
in the greater part of the week but toward 'is
close the market broke away from poliucs ana
stagnation. and under the influence of aggres-
sive attacks upon values the whole list dechne1
violently on volume of business that exceeded
the total sales in the three preceding Gays OF
trading The decline started in Union racine.
in which selling was based on the weakness Oh
the new Union Pacific bonds on the curb, when
reflected. it thought, a much lishter suo-
scription to the bonds than had generally been
expected. The unfavorable financial position OF
the Erie Railroad also wass factor in the de-
cline Regarding Erie, IT should be borne III
mind that the banking interests behind the
companv are SO convinced that the road has &
bright future that they willing to advance
their own funds to tide it over its present DIM
culties. There various developments tha'
came in for much consideration in banking
circles as for instance, the reduction in steel
prices the recevership proceedings in the case
of the Wheeling & Lake Erie, the western
Union dividend and the favorable progress Oh
the crops: but they were not effective specu-
lative influences the course of trading belns
governed entirely by politics until the Union
Pacific and Erie arguments upset quotations.
Wall Street believes Secretary Taft Will be
nominated, and ii hopes he will be elected II
evidently, however, does not intend TO take
chances with such an uncertain thing as pol
itics and, moreover. it is not inclined to extend
itself on the bull side of the stock market until
il knows the character of the planks in the
platform bearing upon the countrys industries
And the same thing may be said of the general
business community. Stagnation in business
apparently has been broken, but business men
do not care to commit themselves to large en-
gagements until they better informed as to
the probable changes that will be recommended
in the tariff. While business Is dull, 1t Is en-
couraging TO note the gradual elimination OF the
weak spots in the situation and the formation
of foundations from which industrial expansion
and financial stability ultimately will grow
There is nothing in the outlook that warrants
pessimism the future, nothing that sug-
gests the sale Of stocks short for long pull
and nothing that should discourage the invest
ment OF idle funds in gilt edged securities.
The merits OF different classes of bonds nat
11rally are discussed with uncommon interest
in the banking community. and comment ire
uuentIy is made the lack Of information pre-
vai1ing among investors and bankers too, on
bonds outside railway mortgage issues Some
of the best investment securities may be found
among industrial bonds-gas bonds. for instance;
and yet even in many banks railroad issues OF
inferior quality generally get the preference in
the matter OF loans simply because of false
understanding the part Of some bankers OF
the intrinsic worth of other than railroad securi-
ties The assertion. of course. is not made that
all industrial bonds safe as gilt edged
railway mortgages, but the point is made, how
ever, that there are many industrial and public
utility securities that have records as invest
ments as good as. and in many cases better than,
railroad bonds. And the assertion also is made
that there not wanting interests engaged
in the banking business who utterly fail to
give this character of security its just due
more from ignorance than from intention. There
about many railroads as gas companies
in the United States. Statistics of the life of
the American railroads show that a large pro-
portion of railroads have from time to time
defaulted their bonds while IN the of
gas companies statistics show such small pro-
portion Of concerns that have failed to pay their
interest charges that the number is not worth
mentioning Gas companies seldom fail. In the
various periods Of hard times through which
the people of this country have suffered ire
mendous losses a. a. result of railroad receiver
ships there have been relatively few losses TO
the holders Of gas bonds. and Yet the merits of
the gas bond poorly known that many
issues. in fact, the greater number Of them, are
selling under railroad bonds, despite the fact
they paying better interest rates.
The gas companies to-day are earning more
money than at any preceding time in their
history, Notwithstanding the fact that the price
of gas throughout the country is lower than ever
before recorded. People must have gas in hard
| times well as in good times, and they seldom
| economize light; they have got to Use sugar
in hard times as we'll as in good times. and they
have got to use the general public service corpo-
rations matter whether or not their incom IS
have been cut Bonds of traction companies that
| supply the transportation facilities of the big
cities are good investments. The fact that the In
| terborough-M Metropolitan Company became bank
| rupt need not frghten investors over city trac-
tion companies in general. Hard times did not put
| the Interborough- Metropolitan in the hands of
| receivers. 1t not outside conditions that
did the work. The trouble came from within.
Most public service corporations are not man.
aged in the interests of a few insiders and in
| stances of mismanagement of traction, gas and
/ fuel companies have been extremely rare AMI
| legislation against the gas companies has not
| driven them out of business. The companies
| 1t is true, have been harassed by the law
makers. but they protected by the decisions
| of the United States Supreme Court against
| confiscatory legislation. II is not unlikely that
in the course Of the next few months the de-
| mand for mortgage issues will increase to a
material extent, owing to the rapidly accumulat-
| ing supply of money in the banks and the low
| rates prevailing for money in the loan market
First class railroad and industrial bonds are
| cheap at present prices, and as there is rea-
suppose that the period of industrial de-
1 preston Will indefinitely. matter what
| the outcome of the fall elections may be. in
vestors are justified in placing their idle funds
| in good income paying mortgage issues, es-
| pecially those securities which represent COM
panies that have weathered many financial
storms.
| Money is easy in most parts Of the world and
| the indications favor long period of cheap
| rates for funds. with no disturbance in this
| country when the demand for accommodation in
| connection with the harvesting of the crops de-
velops Government Withdrawals OF money from
| depositary institutions will be made in the
course of the summer, and this. with the financ-
| ing Of crops that promise TO be worth TO the
| country upward of $4,000. G0000. will come at
| a time when the banks at this centre and
| throughout the land will be IN better condition
| TO handle the operations than at almost any
preceding period in their history. Money has
| accumulated in the banks because Of the de-