Evening star. [volume] (Washington, D.C.) 1854-1972, 1908-02-02
Financial News Letter
By w. G. Nicholas.
Special Correspondence Of The Star.
NEW YORK, February I. 10

| NEW YORK. February 1. 1908.
After the inevitable rebound from the
| panic level the market experienced nat
ural reaction, and from That reaction
recovery is slow.
| There are many things to account
for this. The advance was in a large
degree manipulated to enable the inside
banking combination to unload stocks
bought on the extreme low quotations to
| save the situation The situation hav-
| ing been saved. the members Of the COM
bination proceeded to put the market up
in order to realize a profit from the laud-
able and patriotic performance. The
| combine got rid of a mass of stuff and
would have distributed more il it could
have done so. The game was carried
forward until the record of transactions
disclosed the fact that in trying to bull
the market brokers had to buy more than
| they could SEX. That disclosure indicated
TO the trained intelligence of the manipu-
| lators that the absorptive capacity of the
| public was exhausted for the time being
| Whereupon the big fellows desisted from
| further attempts to crowd stuff down
| the threats of investors.
1t also encouraged the bear contingent
to sell the market short to unsafe limits.
| the result being an unWieldy short In
| terest. In some of the specialties the
| short interest was subjected to discipline
| and driven in at loss. This was the
| case conspicuously in Reading. Delaware
| and, Hudson and Union Pacific. The
! shorts in Amalgamated, Missouri Pacific
| and the Steel issues were also subjected
/ to mild punishment as reminder that
| 1t Is unsafe to sell we'll protected stocks
redundantly. These various currents and
| counter-currents have left the market
/ in rather opinionless and impotent con-
dition. The really. big and important in
| terests are in an inert sort Of fashion
against a resumption of slumpiness be-
cause acute declines and loss Of confidence
| would impair the ability of their corpora
| lions to borrow money. and that just now
is paramount in their plans
| X
Railroad corporations are first in the
race for the money as it comes in sight,
and those which are favored by the bank
| Ing combination are first supplied. The
companies especially under the wing OF
| the Morgan end of the combination are
| the earliest arrivals. New York Central
with its equipment notes led the pro-
cession. Then came Erie with a small
| issue and later Delaware and Hudson.
Rock Island, with its independent organ
ization for financing it's railroad system.
| was one of the quick entries for available
cash, and the powers that be gave dis
tinct preference to another issue of New
York city bonds. The Gould faction is
making a grab for chunk of money on
behalf of the Missouri outfit. The Gould
family is in open disfayor, however, and
1t remains to be seen whether more capt
tai can be enlisted behind its schemes.
The pending offer of Gould securities has
certain novel. one might almost say fan
tastic, features. Investors are given the
privilege of convoluting and interconvert-
ing their money after most bewidering
| fashion. and the proposition is made so
very Attractive that careful investors
look down their nose at the whole affair.
X
The Gould management of the so-called
Gould properties has not been such as to
enthrone George Gould and his advisers
on the pedestal of confidence. The whole
list has suffered tremendous shrinkage,
and nothing that bears the brand shows
the slightest resiliency excepting as may
appertatn to some trivial stock exchange
speculation, where an fmprudent set of
traders put themselves into position to
Denver and Rio Grande and Western
Union are all suffering from the blight
of the Gould control. Meantime it does
not appear that the members of the
Gould family are losing either money or
sleep by reason Of great declines in their
property.
IL the INSIDE history OF the recent panic
is ever told there will stand revealed a
record and spectacle of cold-blooded per-
Torrance equal In merciless cruelty to
the exploits of the head hunters of dark
est Borneo. Men and Institutions were
crowded to the wall and financially
butchered without remOrse and without
conscience. The combination of "situa-
ton SavtOrS carried on the most high
handed campaign ever seen in Wall
street. Having all the cards in their
hands and being endowed with full au-
thOrity to handle the banking situation,
they made the most of their opportunity.
While the business community was be-
ing denied money and help and while a
policy of individual boarding, the banks
themselves secreted immense sums, which
were employed during the acutest period
of the panic for the purchase of stocks
and securities for the benefit of the in
siders. Everybody outside of the COM
bination who had exposed loans on choice
stocks were ruthaessly shaken out and
the stuff bought in for account of the
combination with the money that should
have gone to the victims
People who had loans on less desirable
collateral were carried through the or
deal because the insiders did not happen
to covet the underlying securities. The
whole period of panic and stress was
punctuateG by acts Of favoritism and
cruelty almost beyond comprehension.
Every commission house and brokerage
Office and minor banking house has its
story and stories In confirmation of this
statement