Evening star. [volume] (Washington, D.C.) 1854-1972, 1908-10-25
Financial News Letter
BY w. G. NICHOLAS.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, october A-It is SEEM
ingly the purpose of the big interests be-
hind the situation to bet the stock mar
ket right up to election day. This pro-
gram has In 1t very decided political
feature, and is also inspired by lauda-
BILE desire to make money. The big mar
ket leaders thoroughly understand and
appreciate the value of a great bull mar
ket on the eve of an election-its moral
and practical effect on the minds of bust
ness men and the public in general. 1t
is a vote Of confidence in the election
of Mr.. Taft and in the subsequent prog
ress OF affairs in the direction Of good
times. This very evident determination
on the part of the great market pIungers
and the interests responsible for the man
agement Of railroad ana Industrial cor
porations to go the limit on Mr.. Taft's
election is impressive.
1t may not impress Mr.. Bryan and his
friends in the same way 1t does Mr.. Taft
and his associates, but 1t Is certainly a
remarkable object lesson. Everybody will
admit that the people who are now be-
hind the market and under 1t displayed
extraordinary sagacity and courage in
organizing and engineering the stupen-
dous bull movement in stocks which has
restored In market value a very large
OI lHe lOSS6S lnClQonC 10 the panic
year ago. The correctness of their
judgment in taking up the stock market
in the face of adverse conditions has been
demonstrated. The proof Of the pudding
Is In the eating of it, and folks who
have before them daily evidence OF the
wisdom Of the men who are now in the
saddle are disposed to accord weight to
the advertised purposes and policies of
the governing combination. This is a
case where success has bred conf
1nY1N md tod
erful following in the stock market and
incidentally throughout the whole bust
ness community.
Jay Gould was credited with the re-
mark that good lawyer could take a
man right up to the doors of the peni-
tertiary and insure his safety" Wall
streeters who remember this sage re-
mark are applying the same philosophy
to the present market management
The men who have marked up the price
of stocks 20 to 20 points In four months
may be trusted. SO their devoted follow
ers say. to carry the market not only up
to the day of election, but beyond. Why
not? But what might happen II the
Wall street estimate of the verdict of
the ballot box should prove to be incor-
rect Is the question which the cynics and
the bears are asking. Well, sufficient
unto the day Is the evil thereof II
Bryan should be elected November 8 the
sun would probably rise the day follow
ing as usual and values would not be
annihilated. The big interests might be
relied upon to put their shoulders under
the market and stop any tendency to
cataclysmic liquidation. They will have
great mass of stocks which they might
want to distribute. and as they have abb
solute control Of hundreds Of millions Of
dollars on deposit In the important banks
and trust companies of New York-most
of 1t the money of the public-there will
be nothing to prevent them holding the
fort and letting themselves down easy
The market could undergo a break of 10
to 30 points without washing out half of
their paper profits, and on that much of
decline there would be harbor room
for all kinds Of market maneuvering and
cargo jettisoning.
Under the new method Of trading in
Wall street, 1t is no longer necessary to
have large short interest. OF course, 1t
is always good thing for the bulls, when
they have a market going their way, to
keep alive a bearsh party and to en-
courage short selling. The money they
get from this element pays Office rent,
interest and commissions and leaves some
thing over for automobiles and the opera
and few other Injuries In the old days
the market generals were In the habit Of
| enlisting on their rolls large number of
influential commission houses, each one
Of which was expected to carry a certain
line Of stocks. Now the great plungers
finance their own purchases, making ar
rangements direct with the banks or trust
companies, thereby saving a large scalp
on the interest account and keeping Sc
curities out of sight. In this manner the
floating supply Of shares Is reduced. Com
mission merchants have comparatively
few stocks that they can lend short SELL
ers with which to made deliveries.
The managers Of the campaign are en-
abled at all times to keep tab on the en-
tire stock exchange and to know exactly
where the securities are. They are no
longer bothered with their brokers lend
ing stocks to the enemy. At the same
time an artificial famine in the floating
supply is kept continually in evidence and
the bears are made afraid to sell. The
play becomes greatly simplified. 1t Is only
necessary for the manipulators to mark
up the price of the goods without being
obliged to take over large amounts of
stocks, borrowed from themselves In large
part To be sure when a market of this
sort starts down, ugly breaks are likely
to occur, there being no shorts to buy,
but this is one of the features which as
yet has not seriously Inconvenience any
body. And what's the use OF borrowing
trouble?
From a source which has almost the