The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1908-02-02
NATURAL REACTION
FOLLOWS THE PANIC
Wall Street Manipulation Is the
Direct Cause
RAILROADS ARE FAVORED
Get First Money Available From the
Banking -RIooded
Performance Under Cover
of the Panic.
RAILROADS ARE FAVORED
BY w. G. NICHOLAS.

| BY w. 9. NICHOLAS.
| New York, February latter the in
evitable rebound from the panic level
the market experienced natural reaction
| and from that reaction recovery is slow.
There are many things to account for
! this. The advance was in a large degree
manipulated to enable the inside bank
ing combination to unload stocks bought
on the extreme. low quotations to save
the situation" The situation having been
saved the members of the combination
proceeded to put the market up in order
TO realize a profit from the laudable and
| patriotic performance. The combine got
rid of a mass of stuff and would have
distributed more if it could have done so.
The game was carried forward until
the record of transactions disclosed the
fact that in trying to bull the market
| brokers had to buy more than they could
sell That disclosure indicated to the
! trained intelligence of the manipulators
that the absorptive capacity of the public
was exhausted for the time being.
| Whereupon the big fellows desisted from
further attempts to crowd stuff down the
| Threats of investors. It also encouraged
| the bear contingent to sell the market
short to unsafe limits the result being
an unwieldy short interest. In some of
| the specialties the Short interest was
| subjected to discipline and driven in at
| q. loss.
This was the case conspicuously in
Reading, Delaware and Hudson and
| Union Pacific. The shorts in Amalgam
ated, Missouri Pacific and the Steel is
sues were also subjected to mild pun
ishment, as a reminder that it is unsafe
! to sell well protected stocks redundantly.
| These various currents and counter-cur-
\ rents have left the market in a rather
! opinionless and impotent condition. The
| really big and important interests are
! in an inert sort of fashion against a re-
| sumption of slumpiness because acute de-
clnes and loss of confidence would inn
pair the ability OF their corporations
| to borrow money and that just now Is
paramount in their plans. -
| Railroad corporations are first in the
race for the money as it comes in sight,
| and those which are favored by the bank
| ing combination are first supplied. The
companies. especially under the wing
| of Morgan and of the combination, are
! the earliest arrivals. New York Cen
! trial with its equipment notes led the
procession. Then came Erie with a
| small issue and later Delaware and Hud-
| son.
| ganization for financing its railroad sys-
| tenn. was one OF the quick entries for
| available cash and the powers that be
| gave distinct preference to another is
| sue of New York city bonds. The Gould
| faction is making a grab for O chunk
of money on behalf of the Missouri out
fit. The Gould family is in open disfavor,
| however, and 1t remains to be seen
whether more capital can be enlisted
behind its schemes. The pending offer
of Gould securities has certain novel. one
| might almost say, fantastic features In
| vestors are given the privilege of con-
voluting and interconverting their money
| afteri a most bewildering fashion, and
| the proposition is made so very 'attrac-
tive that careful investors look down
their noses at the whole affair.
, The Gould management of the So
| called Gould properties has not been
such as to enthrone George Gould and
! his advisers on the pedestal of conf
! dence. The whole list has suffered ire
mendous shrinkage and nothing that
| bears the brand shows the Sigh test re-
| siliency excepting as may appertain to
| some trivial stock exchange specula-
| tion, where an imprudent set of traders
put themselves into position to be
trimmed. Missouri Pacific, Wabash,
Denver and Rio Grande and Western
! Union are all suffering from the blight
%of the Gould control. Meantime 1t does
| not appear that the members of the
! Gould family are losing either money
or sleep by reason of great declines in
| their property. This may be because
their real interests are in various pay
ing links in the chain like that 1900
feet of Iron Mountain track connecting
the Gould lines with the st. Louis Ter
| ninal system, which exacts a tax of 81
for every car passing over it (from
$500 to 5000 cars day.. This little
| link of track which may have cost the
elder Gould $4,000 yields to it's heirs
| anywhere from 81 100000 to 1900 900
year. Then there is bridge over
the Ohio, Just above Wheeling, which
is the Individual property of Helen
! Gould. What tax that link imposes on
! the revenue of the Wabash is family
| secret. 1t may be assumed with safety
that the result is a reasonable return
on the family investment If the
| Goulds have enough of these little fat
things they can look with equanimity
on the shrinkage in the general value
| OF their railroads.
II the inside history of the recent
| panic is ever told there will stand
revealed a record and spectacle of
cold blooded performance equal in mer-
| CHESS cruelty to the exploits of the
head hunters of darkest .Borneo. Men
| and institutions were crowded to the
wall and financially butchered without
| remorse and without conscience. The
| combinatio of Situation Saviours''
| carried on the most high handed cam
| paign ever seen in Wall street. Hav-
| ing all the cards in their hands and
| being endowed with full auth ority 10
| handle the banking situation they made
| the most of their opportunity. While
| the business community was being de-
| MED money and help, and while loud
| outcry was being made against the
policy of individual boarding, them
selves secreted immense sums and
| which were employed during the
acutest period of the panic for the pur-
chase of stocks and securities for the
benefit of the insiders.
Everybody outside of the combination
| who had exposed loans on choice stocks
were ruthlessly shaken out and the
stuff bought in for account of the COM
bination with the money that should
have gone to the victims. People who
had loans on less desirable collateral
were carried through the ordeal be-
cause the insiders did not happen to
covert the underlying securities. The
whole period of panic and stress was
punctured by acts of favoritism and
cruelty almost beyond compreh ension.
Every commission house and broker
age office and minor banking house
has it's story and stories in confrma-
! ton of this statement