New-York tribune., 1909-05-10
FINANCIAL MARKETS
NEW STOCK RECORDS.
Speculation 4ctiUe and Investment
Buying HeGUy-M0ney
Little Firmer.

dustrial Issues making a new record for the
yea- in Saturdays operations ~ 12485 for the
prominent rails and 9333 on the same day for
the chief industriais- Reactions from the best
figures were unimportant, but at times the char
acter Of the dealings suggested quiet distribu-
ton OF the high priced shares under cover Of
active manipulation for better quotations IN the
so-called specalties. this tendency being espe-
cially pronounced IN the transactions toward
the end OF the week when such issues as Union
Pacific St Paul Northern Pacific and Great
Northern fuctuated within narrow limits while
cheaper grade stocks made rapid progress tow
ard a more advanced range There was no
indicat ton, however. that the substantial inter
ests behind the bull market were about 10
change their position permanently, but the spec
ulation. however, presented many dangerous
features and suggested the imminence OF
sharp decline q consequence OF q soTnewhat
topheavy bull account. At the moment II Is
not q safe market for traders on small margins
but its persistent strength neVertheIess haIuLal-
" encourages public operators who believe they
end in that strength ample reason for buying
s4 rreva ling quotations And certain houses IN
the street are helping this argument along oy
accepting accounts on ridiculously snlaA mar
gins While there is no warrant for preaching
lower prices so far as the permanent tendency
of +be rLet is concerned in the course or the
next few months, there is adequate excuse TOT
words Of caution at this tuncture for the Dull
speculation has reached proportions that VIII
r,,n into a natural temporary decline without
the DEVELOPMENT Of adverse conditions in the
I,,.frees and financial situation, unless all pre-
cedeDts are 10 be broken. Stocks are not yet
al an inflated level except in few instances
but prices have enjoyed g practically unlnter-
rtIuted advance since February, and II IS absurd
70 believe that the movement can continue Tnuch
longer without the elimination Of weak holdings
through the process Of forced liquidation wholly
as consequence Of weakened technical condi-
tions
In view of the fact that the public as repre-
sented by commission house margin trading mas
been an active factor in the market, 1t Is rea-
gonabIe TO suppose that the stocks to fill this
demand have come from the big operators who
are waiting to recover them at cheaper figures
In conservative circles it is believed that Sc
curities eventually Will sell well above the rec
ords Of the last week, but Il also Is believed
that in the near future there WIFI be a material
setback owing 70 the one sided speculation
that has been under way for such an extended
period Just as long money remains easy the
tendency will be 70 buy securities for invest
ment account and this movement Will encou-
rage speculation vide scale in all depart
ments of the market. though in the course Of the
latter operation declines large enough to wipe
out small bull accounts VIII develop. General
factors affecting the intrinsic worth of stocks
and bonds are most promising. The actual news
Of the last week was in favor Of the owners
Of American investment issues. but there was
so much overtrading the long side Of the
market that many cautious holders decided TO
let the other fellows have their securities on the
theory that when Wall Street is the most cheer
ful spot in the country it is a good time TO get
out of stocks that show handsome profits. Spec
ulation in securities and in wheat is expanding
too fast. but it is not likely the people who
confident they can make fortunes at current
price levels on borrowed money will pay the
slightest attention to the words of warning that
come from quarters where movements Of this
sort have been observed for years. The time
has not come for the speculative pendulum to
swing permanently against advancing mar
ket but each successive advance brings prices
nearer the level from which sharp reactions
may be expected 10 take place. The general
outlook favors long period Of business growth
unhampered by foolish and restrictive legisla
ton and as a consequence people who do not
concern themselves with the ups and downs Of
speculative operations. depending upon actual
Investments for their incomes, need have
uneasiness over the future value of their hold
ings which will be worth far more az this time
year hence than they are at present
The Supreme Courts Interpretation Of the
commodity clause Of the Hepburn act, the signs
Of distinct Improvement in the iron, steel and
copper industries and indications of general
business revival presented in enlarged bank
clearings and railroad earnings are factors that
strengthen confidence in American investment
securities. Owners of securities and persons
gagged in legitimate business enterprises may
depend upon our courts for protection against
legislation that tends toward confscation and
the knowledge that it is the policy Of the courts
and the Republican administration TO make no
discrimination between the producer and the
consumer. the transportation companies and
their customers. will give American stocks and
bonds OF merit a wider market and bring into
the channels OF trade capital that long has been
idle In the month just closed more railway
mortgage issues were placed with investors than
in any month Of the present year. and since
January more than $50 100000 new securities
have come upon the market. with all indications
pointing toward an expansion in the movement
in the rest Of 1909. In the demand for the lower
grade bonds by individual investors and institu-
tions including banks. there is reflected a re-
turn of the confidence that disappeared in the
period Of the panic and the business depression
following when there was no inquiry for mort
gage issues except for those of the highest
class The railway bond market is extremely
active The municipal bond market has seldom
been in so satisfactory a condition as at present,
willie state and county bonds find ready pur-
chasers. an indication OF the latter demand
being found in the success which the bankers
who took the recent New York State per cent
canal bonds are having in disposing OF them.
As high grade bonds apparently nave about
reached top prices. il is not surprising active
buying has developed among the cheaper issues,
including public utilities mortgage securities.
and II IS likely that until the money market
moves TO q materially higher level activity in
this department Of The securities markets will
continue II is expected that large amount OF
foreign capital Will be invested in American
railroad bonds, particularly in new issues, which
viii be forthcoming in volume in the second
half Of the year from the railroads that have in
mind extensive plans for financing maturing
obligations and the raising OF additional capital
for extensions and general improvements.
Money rates showed distinctly hrmer ten
dency last week, while sterling exchange con
tinued 70 rule al the gold exporting level with