The Washington herald., 1909-08-23

New York, Aug. 22-Pricr to last week
the market had advanced for eight weeks
in succession without material reaction
Curiously enough. the reaction proceed
ing this long continued upward move
ment was on a day when Wall street
teemed with rumors Of Mr.. Hauimans
Illness. just as last weeks reaction be-
gan to the accompaniment Of food Of
reports to the general effect that Mr..
Hartman had not been entirely cured
by the treatment abroad. and on the ad-
vice of his physicians was coming home
for rest and an "after cure" Mr.. Har-
riman's health is undoubtedly a matter
Of marked Importance. but it is likely
that both reactionary movements would
have occurred ut about the same time
had the reports regarding him continued
satisfactory. though undoubtedly the So
called Hartman stocks would not have
been so greatly affected,
Certainly at the beginning OF last week,
as was freely commented by critics of
the market. the purely speculative struc-
ture OF the stock market was as weak as
was Mr.. Harriman's constitution. On the
top Of a deliberate. resolute, and entirely
logical upward movement there had
come speculation that was both exces-
slve and inordlnate.
Caution Cast Aside.
A great many spectators had cast eau
ton aside. had increased their commit
ments as the market advanced, and con-
verted previously well margined accounts
into so-oalled pyramids. Others in great
number had given 10 brokers orders 10
close out their holdings at point little
below the market. and these pyramids
and stop loss orders had certainly and
obviously made a topheavy superstruc-
ture. from the standpoint Of the spec
ulator. Reports OF important plans for
New York Central and Union Pacific had
stimulated buying in the closing days OF
the long advance. but those reports en-
tirely lacked official confirmation. and
the reports OF business improvement and
crop progress had long been OF such
uniformly favorable character that they
came TO lack that sort Of interest that
inspires purchases Of securities.
AS il was tersely expressed by a Boston
speculatoT. "a continuously flung flag can
signal no unusual event" and there was
no doubt that the signs OF business i'm
provement had been so long displayed
that eventually they failed 20 attract the
eye. Thus the market was technically
in condition for q reaction, and the fact
that the speculative pyramids had been
built UP very largely on reports Of I'M
portant business transactions 70 follow
Mr.. Harrlmans return naturally supplied
q direct occasion or preJext FOR the re-
action when II was officially announced
from the Union Pacific offices that the
fnancier was coming home 10 rest and
not 70 work
Movement Intensified.
This circumstance also undoubtedly IN
tensihed the reactionary movement. for
there is no question that Mr.. Harriman's
plans have now, as they have had for
more than three years. a great influence
upon the imaginations OF spectators.
There have been so many occasions in
the past. notably the declaration Of the
Hartman dividends three years ago,
when plans OF the so-called Hartman
party have been elaborated TO a most
dramatic climax that speculation over
these plans has been keener and more
interested among many spectators than
over other more important developments
that are not announced with regard to
stock market effect.
The signs Of business improvement,
though they were passed almost IN
noticed by the majority, were as bright
throughout the week as on any previous
directed attention 10 the steel trade they
showed most of the plants operating at
full capacity and featured q further
Improvement in the steel rail and car
equipment business, which alone was
needed 20 bring the business up TO maxi
mum capacity. In railroad equipment
railroad and steel trade papers noted an
abundance OF orders In the middle Of
the week. and these reports were sup
plemented Saturday by a report that
the Chicago and Northwestern had placed
an order for $11.Oo0.0OO OF new equip
ment
Car Shortage.
A car shortage rather than a car sur
plus seems in prospect when the crop
movement attains full momentum, and
this prediction. which was made by the
chairman OF the Interstate Commerce
Commission and supported by several
railroad men. presents one Of the few
business indications. Conges-
ton Of traffic. such as that IN the winter
OF 19O6-lSO7, is certainly undesirable. But
1t is expected that the crop movement
will begin earlier this year than then
and proceed in more orderly fashion.
Higher average prices than in 1906 prevail
for grain. thus Offering to the farmer an
inducement for speedy harvest and sale,