New-York tribune., 1908-01-26
The Financial World.

| TO be considered of consequence enough to
be dominating market influence. Money con-
| tinues to ease. Most Of the great banks OF
Europe cut down their discount rates: and there
threatens to be abroad, as here, an apparent
plethora of ready funds. Conservative observers
are not. however. led into undiminlshabIe enthu-
siasm over this particular phase Of the situa-
| tfon. 1t becomes assured that money will be
available for business purposes; but in far as
| Wall Street is concerned the supply Is likely to
! offer cheapness only upon r6aus subject to de-
mand-what the Stock Exchange denom1nates
! call loans. Credit upon time can hardly be ex-
pected forthwith to have accommodation at low
| rates. And that is the manner of borrowing
which Wall Street feels most need for, if there
is to be assurance of safety for security market
| commitments. There Will be no need for lenders
to implore the consideration Of borrowers Too
| many of our great corporations are in the mar
ket with new bonds and stock and short time
| notes-representing actual exigencies-
And this is true even to a greater extent
among corporations in the industrial world
Margins of profit have been cut to make attrac
tive dividend exhibits; the building up OF sur
pluses has been neglected This it may be.
counts for the financial discredlt With Whlch the
Smelling Trust seems to DE threatened-nay ac-
count for the prospect that Wall street dis
cusses of the abolition of dividends upon Lead
Trust The Lead Trusts unhappy situation
seems to come from it's mortgage to the Smelt-
ing Trust 1t is not generally known that,
though the market for pig lead (raw material
required by the Lead Trus) has become de-
moraIized. the National Lead Company has to
confine it's purchases To the SmeitinS Trust
and not this alone but that an arbitrary dl1er-
ential" of 81 a ton has to be contributed by
the Lead Company To its Smelling master NJ
any time that sort OF thing would De burden
some: under present circumstances IL Is quite
affective enough to excuse the Lead Trusts
managers if they for time beg or from dlFi-
dends. Perhaps. though, there may De some
consolation in the pretty feeling that anyhow.
the tax will help alleviate some OF the SneitnS
Trusts independent woes
Professional Wall Street. playing specula-
lively may for the time affect TO be cheerful
over money market conditions which will enable
borrowers on stock collateral to get cheap cali
money. while time rates stay stiff and even
onerous; but those Spectators who lie c0ntinU-
ally in wait TO ambush investors VIII be stil
more gratffed The truth is that though our
crisis is past-the strength and the integrity OF
financial New York splendidIy attested--ve
have come. none the less. into a money market
readily subject TO manipulation. and not unlikely
20 disclose nervousness. This is not an ideal
status.
What however. must command eoi-.'''l'r -
the rnqlestionabIe fact that standard SecI''NieS
are selling far below what is their Ir'TaD-' m
trinsfc value: and the bearing TINS can nave u.'h
the conservative Investment mind is Indlelils'
forcefuIIv In the saddress of President john
NJ. Taylor. of the Connecticut Mutual Like di7-
cussing this inquiry. What effect have the
abnormal financial conditions Of the year haj
upon the large holders Of high class securities
President TAYLOR resents those foolish theories
that have had influence in some official quar-
ters that there be makesElft and etii'lF 'e'tl
appraisal of stocks and bonds TO help out u--
numbed balance sheets though he points "--
frankly that there has been such recession l.-
security values during the year that some s'.7-
panies with slender SURPRISES must within tls
letter of the law have been brought perllou~.s
near 10 technical and commercial '7soIVency-
What particularly is important from jle
broadest investment standpoiut-Ar- Taylor
speaking himself for a market value total pass
ing $2S.00O000-is this analysis and judgment
upon current market values: They are tel1-
porary vaIueS-nominal priCeS-ot certain classes
Of Investments based on current market quota
tions. They mean nothing 10 the holder VINO -
not compelled to bay or SELL ana VINO fakes oit
the security To carry il TO maturity They have
significance as To the intrinsic value or an in
vestmeut.'
President Taylor adds: "On December 81 wa
held and carried at their cost S-I.54S.Sl5 I'm
bonds and SS29O76 in stocks. q total Of SOS
377SS2, and their market value on that day. ON
a very conservative basis, was S26.62t,I5- and
in default in principal interest or dividend
They worth their cost: loss has been
made them: they yield the same income and
these market values viii be gradually recovered.
as monetary conditions change for the better.
We find no sound reason to resort to any make
shift eXpedienJ. nor 10 take advantage of the
scale Of values Of year ago. nor of q series OF
months or years. nor Of any other optional basis.
but to let the exact facts sneak for theruzsIvcs
they clearly viii TO any one in auyyiSe con-
veTsant with the rise and fall Of nominal quota
tiOus of Investments. and their manifest causes"
In this discussion. candid and clear and whole
some. there Is sanity and there * weight And
L. the extent that this oUJSpoSen Couuycti.u-
fiuancier-successor of doughty Jacob L. Greene
-bespedks the national financial mind there IS
ef
the part of the rank and file OF investors Sa.-
orally, the lesser with the greater aIke-aII have
the right to take heart in the assurance fro.u
Such conservative quarter that market values
are bound to he gradually recovered as ulon--
tary conditions change for the better"
As 10 the security markets immediate course
most influence is likely 20 be exerted by the d.lv-
by-day transactions of the professional traders
of the Stock Exchange. That sort of business
has almost exclusively for some time past made
the market What Wall Street accIaims as ~th.
public" can not be located in any important cur
rent activities Yet most of the commission
bouses of the Street state that they. continue to
be in receipt OF orders for small lots OF stock
from customers who pay in fuu for their pun
chaseS. And this is item of more conse-
quence than casual reference TO il may seem 20
justify. Take New York Central for example
In conservative quarters that property's situa-
ton is mildly described as unsatisfactory. but
so great is the influence exerted by the fact that
j. p Morgan x co. have been induced to come
TO its rescue that from all over the country there
have issued orders from investment buyers
whose absorption Gin odd lOts) a total aSgre-
gates large figures Where s1ch public support
is lacking there also is lacking strength
What is clear and appreciated among fair mar.
zet observers is the fact that good stocks gem
eraIlv are worth more than they are selling for