The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1910-04-03
THE FINANCIAL
SITUATION

Conditions in the eastern securities mar
ket are such as to cause apprehension OF an
other serious slump in prices throughout the
entire list. 1t hardly seems possible that the
market can hold up TO present price levels
without the strongest kind of support from
the great financial interests. The decidedly
erratic fluctuations are effective in destroy
ing confidence in the value of the securities
for permanent investment and tend to keep
the real investor out Of the market and
through that very condition prevent any
marked degree of stability and hrmness in
prices
Investors are becoming chary of putting
money in1o securities that may drop in mar
ket price anywhere from 10 20 points IN
few weeks time 1t Is only the speculs-
tor who is attracted by such conditions, and
his idea is simply TO buy at as low point
possible one day and sell again the next
day or even the same day, at almost any
advance that will give him q margin of profit
The real investor buys with the intention
Of getting steady returns on, his money, or II
he buys a nOn-dvidend paying security IL is
with the idea that such security will ad-
vance in price sufficient to insure him good
interest his investment until the divi-
dends begin: and even though his lntention
Is 10 hold the security future dividend
Garner. he does not relish the idea that in
case he is compelled to sell he may. on ae-
count of the uncertain market, be compelled
TO sell at a loss
II is recognized by all those having the
welfare of the countrys business at heart
that this state of affairs is dangerous. and
there have been attempts to prevent II by
legislation against dealing in futures on the
Some measure of reform will undoubtedly
be brought about-in fact. has already been
accomplished-for the adjustment OF the
unlisted department of the New York Stock
Exchange IS a direct result of the invesuga-
tinn by and report of. the committee ap-
pointed by Governor Hughes, which made
recommendations tending 10 improve existing
conditions The demand is for more pub
LEFTY in corporation affairs. and as state
ment Of the affairs of company sworn TO by
certain of its officials is a requisite OF the
application for listing the security. a large
measure Of publicity is thus attained.
The New York Stock Exchange is the
recognized barometer of conditions in regard
10 the securities generally termed Eastern.
and which while not being at all local IN
character or scope are controlled by Ea siI
capital and listed on the New York STOCK
Exchange. AS that Exchange is naturally
the center of activities for such securities
and It's quota tons and business published in
Tbe nspers of every city OF any size in the
country the periodic depressons in the price
Of the securities have a more or less unset
Ting effect upon activities throughout the
The cratic action of prices during the
week has created a feeling OF uncertainty
for the immediate future and raised ques-
ton in the minds Of the close observer as TO
whether il indicates the consummation OF the
recent determination to advance prices ana
SO unload the large quantity of securities
acquired at low prices during the last slump
or a change in the optimistic opinion as 10
the outlook for the immediate future
Bond offerings Of the month of March have
been of great magnitude and have not been
any too well absorbed by the public. The
opinion is quite freely expressed that some
81 the railroads will have 70 resort again 10
short time note issues TO tide over the need
for immediate funds. James ]. Hill OF the
Great Northern is quoted saying that the
railroads Of the country Will require new
capitaI to the amount Of Sl,6Oo, Ooo.Oeo
wear for the next six years Unless the
new bond issues meet with reader sale
than Of late the railroads Will have TO race
serious problem to secure the needed
capital
Sooner or later the financial powers Of
the country must realize the fact that II
they desire to use the publics money Tor
the establishment and furtherance of enter
nrises. large and small. they must provide
far greater degree of stability as TO mar
ket price must curtail the present methods
of overca pitaliza ton. must put an end 10 the
fragrant manipulation so often seen ana as
sure the investor better security for his
principal
The determination Of some of the railroads
10 advance wages seems calculated TO pre-
vent any strike troubles and continue the
present prosperous conditions In the railroad
world The great drain upon the earnings
necessary TO meet the increase may, how
ever result in advanced freight and pas
senCer rates.
The high price Of cotton is apt to bring
about hardship as some of the cotton goods
manufacturers are curtailing production ana
a great many operatives are idle.