New-York tribune., 1908-03-09
THE WEEK IN WALL STREET.

drawn The proXimate cause Oh SATURDAY
noteworthy market was the announcement oi
the successful ending of the long e1ort LOT tho
reha biltation of the Knickerbocker trust COM
nanv and the formal authorization by the court
for the resumption of business, wall street rei-
sonins that the obtaining OF the aSsehtS OF
virtually the entire body of the depoSltors 10
the plan of resumption, which involves gradual
pavrnent of the deposits, was a hlghiy SlShlIi-
cant indication of Improvement IN puohc 1eei-
ing and of the gradual re-esta bliShment or con-
fdence In other directions, also, there are IN
dcations pointing 10 the probability that the
worst of the business depression mas peen seen
and that recovery. necessarily Slow, is beginning
TO set in although these signs may easily pe
misleading and are not yet so definite as 10 give
grounds for real optimism regarding the outlook
for the near future. One Of the most encouraS-
ing symptoms is the report by the mercdhtiie
agencies of the disposition of merchants IN va
rious lines 20 place orders for delivery as far
head as the fail in addition TO filing their I'M
mediate reo1lirements Another is the report
OF the American Railway, Association OF a de-
crease of about Z per cent in the hrst nan Oh
February in the number of idle freight cars III
the United States, the first decrease OF any
size since October. the panic month The iron
and steel industry, the cldtime barometer OF
trade" shows signs of quickening. but accu-
rate measurement of the extent of the improve
Inent is not easy.
As copper mining was the first industry to
feel the influence Of the bad times, and as the
uses of that metal have been so greatly en-
larged genuine recovery from the industrial
and financial crisis might be expected to be
forestadovye by charging demand for copper
and rise in the price; but the lmproF eTtlent
noted 4 few weeks ago has been halted. Money
market rates are low, and great 3ccumulat1onS
OF cash have been piled up in the banks, but
money cannot be said to be easy, and large
borrowers must still pay stiff rates for accom-
mediation. Railroads still reporting dlsap-
pointing gross and net earnings, renecthg
diminished traffic and high operating expenses,
and are in no position to expend any funds ne
ycIld the sums necessary to keep their lines
from rlIinous deterora ton although in the last
feyv weeks the shrinkages have become a little
less large. Bank ciearngs. an index OF the vol
ume OF general business, are at low point the
total cTearingS OF one hundred cities for tebru-
arr, showing a decrease of - per cent from Jan
uary and - per cent from February Of last
vear The depression i'll the metal market and
1he uncertainty as to immediate betterment
found further reflection last week in the cut
ting in half Of the dividends on American
Smelling and Refining common and Calumet and
Hecla Copper stock
With underlying conditions sound. as they are.
the rightine Of the situation might be expected
he much more speedy than has been the case
following former severe crises; but political
complications may delay the recovery from the
present depression. for the restoration of con-
recovery, and until there shall be apparent
subsistence Of the hostility now shown in so
many parts Of the Union toward corporations,
especially railroad corporations, capital Will not
be availa ble in the amounts necessary for wide
spread revival of activity for this is the cor
poration era The impending Presidential cam
paign is another deterrent. until the candi-
dates and the policies OF the two great pontlcal
parties shall be known and the outcome Of the
contest shall be reasonably clear the restoration
OF confidence must be expected TO be slow
The bill introduced in the House Of Repre-
sentatiyes by Mr.. Hepburn, imposing tax Of
30 cents & share on all stock sold after June 30
next. has been the subject Of much discussion IN
Wall Street during the week That the meas
ure will be enacted into law, at least at this
session of Congress and in its present form, few
believe: but the prominence of Mr.. Hepburn IN
the House. of which he is of the most in
fuential members, taken with the fact of the
widespread agitation against stock gambling
so called-an agitation which is one Of the
natural sequels OF a panic-llas in q marked de-
gree attracted public attention TO this bill
Strong protest was made against the in1posl-
ton Of the tax Of two cents share levied by
the state Of New York upon stock sold on the
New York Stock Exchange, but the Hepburn
bill would increase that tax twenty -hvefod. II
would without doubt put a stop TO trading on
small margins. but 1t would with equal Ger
tainty put an instant end to practically all other
business on the Stock Exchange-in other
words would close this market, as we'll as the
minor exchanges in other cities to investors
well as 20 all spectators except those of wealth.
The 50-cent tax is imposed upon leach share OF
500 OF face value fraction thereof that
the purchaser of United States Steel common
stock at around $50 d share-and vast mum
Der OF investors hold Steel common-would have
to pay as great tax as would the purchaser of
I.ackawanna. at around S4IJ a share; and the
buyer of Pennsylvania stock, the par value %
Ie.,y
equal burden with the buyer of stock of the par
value OF S100.
1t is inconceivable that the investing public
will in making their purchases and sales rely
upon private banking houses for fixing the
prices of the stocks of the multitude OF corpora
tions many OF gigantic capitalization, now listed
on the New York Stock Exchange, just as il is
not TO be supposed that speculation will be
tingushed--nor would transactions through prf-
vate bankers be tax free What would happen
would be the transferrence Of the business to
Montreal or to London, the additional cost Of
teleeraphing or cabling being negligible in con-
trast to the expense of meeting the proposed
federal tax. The evils of Unrestrained speCula-
ton are not TO be minimized, but the stoppage
of the entire machinery tor the free exchange of
securities is too heavy a price to pay for the
cjIrbing of such speculation Fictitious trans
actions are prohibited by the constitution of
the New York Stock Exchange, the penalty
being suspension for q period not exceeding
twelve months but it is a matter OF common
notoriety that fictitious transactions, wash
sales" are made; and the correction OF that
abuse through stringent enforcement of the
prohibition, would go far toward modifying the
current hostility toward dealings on stock ex-
changes.
The placing of the Western Maryland Rail-
road Company in the hands OF a receiver, on
the application of the management, brings up
to seven the number of railways which have
gone into receiVershps since the beginning Of
the year The troubles OF the Western Mary