The Washington herald., 1910-04-03
By J. CLINTON RANSOM.

By j. CLINTON RANSOM.
-Four and 5 per cent bonds have sold
during the week at the lowest prices
since 1907. The stock market has been
steadily creeping downward since last
December Gold is being shipped IN large
quantities from London and New YORK
10 pay for wheat bought IN Argentina.
Manufacturers of cotton goods are hung
I'D in a market where dollars worth of
raw material cannot be worked up into
a dollars worth or saia0ie product
These statements are paraphrased from
articles published in financial papers dur
ing the week seeking to explain the pres
ent financial and industrial situation.
Stated together, they afford a basis for
studying the markets fo- securities, grain'
and cotton, which leads 10 certain sus-
gestlve and instructive conclusions
Stock Market Disappointing.
Spectators have been experimenting
with the stock market since the first OF
the year, believing that every decline
would prove to be the last and that
stocks and bonds. which seem intrinsi-
caIly low, would certainly take an upward
turn. Yet in the face of the lowest
money market in forty years, in the face
of fair trade and the highest prices for
commodities since the civil war, securl-
ties have gradually and constantly gone
downward. About the middle of February
a short boom in the market carried prices
some ten points up, but that md more
has been lost in the recent declines.
Various causes are assigned, such as
lack of interest. by the public the con-
troll Of stocks by big pools which for
some sinister purpose are putting stocks
lower and lower failure Of the railroads
10 get the expected volume of increased
traffic. the unfriendly attitude of iegisla-
tors toward corporations and the pending
decisions in the cases Of the Tobacco and
Standard oil companies before the United
States Supreme Court.
shaking stocks from Banks.
Recently the idea has been advanced
that powerful forces in Wall street ara
engaged in an effort 10 shake securities
out of the banks held for collateral in the
hope Of getting larger volume OF stocks
for operations on the exchange 1t must
be said that some Of these explanations
do not explain. 1t is probably true that
stocks are being manipulated in New
York in the most shameless manner, or
the governing committee of the stock
exchange would not have taken the dras-
tic action it did last week in adopting
new and stringent rules against pool sell
ing. operations by specialists and wash
sales"
It should appear 10 the close observer
that the trouble lies deeper than any OF
the things mentioned. The fact seems to
have been largely forgotten that back in
1867 and 1903. when securities fell 10 rock
bottom, in four months time. about $ls,-
$4,000 worth Of securities were bought
and taken out Of Wall street by persons
whose names were not familiar to COM
mission houses. In other words, the
stocks bought then were taken in small
quantity by small buyers who acquired
them for investment purposes. BY read
ing, observation and otherwise. they had
learned the game Of Wall street and these
investment buyers have not. as a rule.
sold out their holdings. They bought 5
and per cent paying securities below
par and took advantage of a stuatien
which comes TO man only once or twice
In a lifetime.
Trying TO Get Stocks Back.
Since 1903 Wall street has been engaged /
in frantic efforts 10 get those stocks back
again, and has not succeeded. In all this
period the professional traders most of
the time have been confronted by a
scarcity Of stocks with which to engineer
big deals. and If 1t is true that the recent !
decline in securities is for the purpose OF
shaking them out of the banks, it is only |
another proof Of the scarcity of stocks, |
which ought to make them high in price /
but does not The simple fact is that big |
cities and small ones have a few pro- |
fessional spectators, and outside OF this |
aggregation Of little circles within a big |
one there has been no stock trading for /
nearly two years. The public is not in |
terested. It got its supply OF stocks when !
they were low, Is holding on TO them and /
is not specializing. For many months the /
sales in any given day on the New York !
Stock Exchange have not exceeded a |
million shares, and the fact is the volume |
of shares available sfor speculative pur-
poses does not seem to exceed that
figure.
Between the investment buying public /
and the men who must hold large blocks
OF stocks for corporate reasons the sup
ply has diminished rather than increased
in recent months. The buying power of |
the market is limited and this condition |
does not change. 1t accounts largely for
the low prices. low money rates, and the
stagnant market.
Bull Market Evanescent.
Market letters, financial writer's hired /
to exploit the schemes of the street. and
other subsidized publications have long
been heralding a bull market, which |
does not materialize. The truth Is the
market has been hung up for months, /
with nothing happening to make it fluc-
tuate. The supply OF stocks IS too
limited for a genuine bull movement. and /
the bears are scared bloodless at their
own shadows.
Tons OF printers ink. reams OF paper,
and thousands of telegraph messages
have been used daily in the last two |
months TO boom" the cotton market. /
1t has been freely predicted that cotton |
would sell at Is cents yet in spite Of /
these predictions II has not gone much /
above 10 cents. The speculative world /
has rarely seen greater effort put forth /
10 boost cotton on the strength of a
short crop than has been made during
the last six months. It is true that the
cotton crop of last year was several
thousand bales short. and it is true that
with the consumption of last year and
the one preceding the shortage would
have been very acutely felt. But the
manufacturer has found himself in the