Evening star. [volume] (Washington, D.C.) 1854-1972, 1908-02-16
Financial News Letter
By ". G. NICHOLAS.

BY ". G. NICHOLAS.
Special Cuerespmdenes Of The Star.
NEW YORK. February Is, 1908
There Is likely to be a continuation OF .
political market" for some time to come. It
Is the one thing uppermost In everybody's
minds. and 1t Is the one thing which Is
kept everlastingly stirred up by the vocal
efforts Of the politicians and by the space
which Is given over to the subject in the
newspapers. Capital has fallen into the
habit OF thinking 1t must wait the de-
velopment OF decided tendencies before II
can form judgment as to the future
course Of prices. II It must be kept on
the defensive for another four or nve
years the feeling is that It will seek To-
cation where it can be subjected to the
least damage and that it will not be
tempted to take the aggressive. Senti-
ment is therefore pessimistic all along the
line. and Wall street is taking the dis
couraSed view. Information pours in that
the rest Of the country would like to be
hopeful and cheerful. and that 1t re-
CARDS with open disfavor the gloom OF
Wall street.
What the wiseacres Of the financial dis
trict profess to be- in greatest fear of is
the growth Of dangerous class feeling.
They imagine that the politicians are TO-
menting a nasty state OF affairs between
capital and labor-a condition quite az
threatening to the safety of the republic
as the sectional hatred which led up to
the great civil war between the north and
south. They have worked themselves
into the belief that the country Is pass
ing through the earlier stages Of a seri-
GUS crisis. and that 1t is in actual danger
Of either mob rule or Imperialism. In the
background Of all tbis sort Of talk looms
the gigantic figure Of the specialized man
on horseback. This may be the rankest
kind Of nonsense. but the feeling exists
on the markets and on business in gen.
eral. It is factor In the making OF
prices and must be considered in giving q
truthful picture Of current developments.
The professionals have the market
pretty much to themselves these days.
and as they are overwhelmingly bearisf
in sentiment the market has worked into
an oversold state. In some Of the lead
ing stocks the short interest has become
unweildly. and the bears find themselves
In a position where they might easily be
trimmed. 1t has been in the mind of some
Of the market leaders to make a demon
strat1on against the short interest, which
Is larger in the steel issues. Union Pa
sylvania. Atchison. Missouri Pacific and
st. Paul than IN any other stocks. The
trouble has been that every time the
bulls move and put up prices they meet
a mass Of real stock. which Is the last
thing they have any use for in addition
ing to get rid Of Still 1t is not improb-
able that before the departure Of Mr..
Morgan for Europe. an event now close
at hand. the shorts will be given a lesson
and his allies have already made a kill
Ing with the stocks they bought at the
inside panic figures and unloaded during
the January boom. That however. will
not prevent Mr.. Morgan adding enough
to his profits to buy q million or two
only has $12,OOO.OOO to $15.OO0.OO0 worth
Of Goods in his collection and would
naturally like to supplement these hold
ings with further purchases.
speech which attracts most attention
was that part relating to the invisible
vest pocket reserve. amounting, according
to his computation. to about $40 per
capita against s12 per capita twelve or
thirteen years ago. The aggregate Of
the reserve that is kept out Of banking
circulation is thus shown to be at least
1900. 600. oOO-money which gradually
finds its way back into the banks as the
masses of the people ind their resources
AS long as times are prosperous people
continue to carry liberal amounts about
them. In lean times this reserve dimin-
ishes. With q per capita invisible vest
pocket reserve back to where 1t was
ten or twelve years ago the result would
be the reinforcement of visible circula-
ton to tho amount Of nearly $6O0.OOO.OOO.
sum worth taking into account In
figuring on the future The lesson taught
by this exhibit and illustration Is that as
the people spend their vest pocket reserve
supplies Of cash in bank will increase
and presently stocks OF money In sight
will be mountain high. Then will the
machinery Of business be fabricated and
the country in a position to start
afresh on another upward and forward
movement.
Much is heard these days about the pro-
digious short interest in Steel. By some
It is estimated as high as 1.OOo:Oo shares:
The specialists treat this estimate win
open skepticism. They say that the great
bulk of the supposed short interest is
really long stock sold for inside account
and held back for delivery later on. TINS
was the trick played in 1892 and 1893.
holdings and borrowed stock wherew1th
to make deliveries. Messrs. Frick.
Schwab Morgan, Rockefeller and most of
the other big fellows in the combination
have been accused OF pursuing this foxy
policy, thereby concealing from the gem
eral view the fact that they were getting
out of their holdings, while the public
was buying.
The whispererS have been uncommOnly
busy this week. The names of more than
one important institution and interna-
tional house were freely used, and there
was a good deal Of liquidation and short
selling In consequence. one house whose
fortunes have been more or less ldentlneo
with the Rothschilds was all but pup
lished openly as being on the shoals. II
IL an open secret that the house in ques-
ton was helped out late in October to the
extent of about $20.0OO.0O hooking every
thing it had to secure those who came to
the front Difficulty seems to have been
encountered in working out of the hole.
but II time Is given there will be a solvent
outcome. The trouble Is that other con-
corns are held to be more entitled
to help than the one referred to- and II
have to be the one. Such a catastrophe
has been largely discounted. however, as
the affair is public property.
AS the time approaches for the going
Into effect of the amended interstate COM
merce law. calling for the segregation OF
coal lands owned by railroads. interest
in that issue intensifies. The date for the
new law to take effect is May 1 next An
underst anding has been arrived at be-
tween the coal roads and the administra-
ton whereby the question Of the validity
cation with the least possible delay. BY
special dispensation the questions at issue
will be submitted to the courts very soon
after May /, and it is not improbable that
a Supreme Court decision may be reached
next fall or winter. The closer they get
to the actual contest the less certain are
the railroad lawyers that they will be
able to beat the law.
The stock exchange has not yet
IN fL-n axaDs y