Evening star. [volume] (Washington, D.C.) 1854-1972, 1908-02-05
BULLS AND BEARS

A banker expressed the opinion ycster-
DAY that there Is now a smaller, amount
or securities of the second and third
classes pledged as collateral for loans
with New York lenders Of money than at
any time for some years back. In dis
cussing the situation somewhat in de-
TALL he pointed out that during recent
sears lenders of money had in some in
stances stepped over the bounds OF con-
servatlsm and accepted as collateral Sc
cur1fles for which there was only very
united nm, market during the panic of last
i IAN. he understands that to very
large extent the inferior classes Of Sc
curitles had either been taken a1p by their
owners or CLOSED out by the institutions
ana individuals that held them as col
iateral. Consequently. he concludes that
not IN many years have the banks and
trust companies been in such a sound con-
ulilon with respect to their loans
another man. in discussing the con-
tlnued weakness In some securities. the
position of which apparently Is perfect
ly sound. calls attention to the fact that
during the last three or four years a
very large number of enterprises Of a
private character had been started by
men who had been extremely successful
IN tnelr operations in connection with
established companies. and that before
many of these new enterprises had been
placed on profitable basis the stringency
IN the money market and the light de-
mand for Investment securities developed
ana that. therefore. the sponsors of the
new undertakings were compelled to in
vest considerable amount of their own
money In order to keep things going.
In some instances, he adds. in order to
raise the cash, first-class securities were
taken out OF strong boxes and disposed
of. According to his information this
class. of transactions are still being made,
and they are responsible for the weak
ness of certain high-grade securities. Be-
cause OF the extremely low rates for
money he does not believe that 1t will be
necessary to sacrifice standard securities
70 the extent to which it has been done
Tor some time in order to protect new
securities or others for which there is
not an active market. It is believed,
however. by men we'll informed. that some
little time will be required to adjust sit
uatlons OF this character. and conse-
quently the market for individual Sc
cur1t1es will continue irregular because
or those transactions, If for no other
reason.
1t Is understood that one of the larg-
est commission houses in this city, which
recently announced that 1t would soon
discontinue two important lines of it's
business. is of the opinion that the specu-
iative business in stocks will be unsat-
isfactory~ for some time to come. While
those of a more hopeful mind do not be-
Heve that the present stagnation will
continue for a long period. they do not
look for any material change for the bet
ter in the near future. Several promi-
nent railroad officials say that they can
not see any special change in the volume
Of traffic being offered
1t is understood. however, that the
earnings OF the Rock Island system,
which, because Of the large area served
by the lines of the system. may be taken
as very good barometer Of railroad
traffic. were considerably better during
January than during December. The
official figures will probably show that
the management was able to control the
expenses to a greater extent in January
than in December