The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1910-08-08
Review OF Week DisclOseS
Queer Fluctuations.
UNDERLYING MOTIVES HUMAN
stock and Commodity Prices Are
Influenced by Crop Reports, Gov
eminent Statistics, Bank State
ments, and, Above All, the Tenacity
of Man to Get Hold OF the Dollar.

tell the whole story of a big movement
in the stock market Bank clearings,
earnings Of railroad and industrial COM
panies. money rates here and abroad.
movements OF gold pack and forth across
the Atlantic. statistics of the country's
export trade. estimates OF the value Of
the crops. comparisons Of governmental
receipts and expenditures, index numbers
showing the cost OF living-every impor-
tant business and financial factor that
may be expressed in figures has a direct
and most important relationship TO the
upward and downward swings of security
prices, but every pronounced movement
IN either direction is carried further than
the figures Justify by impulses that are
personal or human.
No figures OF business or financial con-
ditions could explain the extravagantly
bullish enthusiasm which carried stocks
to the level from which they collapsed in
1908
II was the hilarity of individuals pro-
dueed by their high success that did much
Of 1t. Figures fan to denote the cause
for the stu high record prices Of 1900. nor
do they at all adequately explain the
extraordinarily low prices to which stocks
fell in the following year
Causes of Increases.
Recklessness and intrepldity bern OF
long success in speculation helped carry
prices unduly nigh; recllessness and
criminality born of long immunity in the
conduct OF banks carried them unduly
low and directly precipitated panic AT
the climax OF these upward movements
the enthusiasm, exuberance, or reckless
ness OF individuals carries prices TO a
pinnacle from which the fall had neces-
sarily TO be violent when the inevitable
reaction came.
II has happened so again The salts
factory recovery which the country was
making from the 1907 panic was carried
70 an extreme IN the markets and else
where by people who forgot prudence
and ordinary business Judgment in the
enthusiasm engendered by success in bus
mess or speculation. With those of them
who were heavily committed in the stock
market it has this year been the same
old story Of overextension, stubborn re-
fusaI 10 dispose Of stocks at a sacrifice
OF paper profits and. finally and inev-
itably. forced sales at heavy losses, and
a concomitant extraordinary depression
OF the security markets.
This year. as in the past. after the
course of the market had discounted a
business reaction discernible by all men
Of good business judgment. the market
was forced TO contend with the indiscre-
tions and errors OF wealthy individuals
Bit of Salient History.
The story OF that crisis has passed into
market history with the private transfer
OF at least 100000 shares Of stock. be-
ginning with the big block of United
States Steel shares taken over in the first
month OF the year. continuing through
the liquidation Of the Pearson Farouhar
syndicate, and ending, as now seems GER
tain. with the transfer Of stock held by
half a dozen other men only latterly re-
puted OF great or considerable wealth.
But the personal element remains. As in
every bull market enthusiasm has carried
prices extravagantly high. so in every
previous bear market pesslmism has car
ried them dejectedly low. In the past
there has been a swing as wide in one
direction as the other. and bull failures
or losses. as Mr. Hartman liked 70 point
out. always have been followed by bear
failures or losses. At present unless per-
sonal impulses have been tempered by
study Of the past the purely personal or
human element greatly favors higher
prices
Moreover.' personality in banking. as
at present in stocks. tends toward sta
bility. The few extreme pessimists who
have ventured 10 compare 1910 with 1907
have left out OF consideration the elimi-
nations from New York banking circles
only three years ago. Never before was
there such thorough housekeeping in
the banks Of any city. and never since
have the banks Of any metropolis been
managed more conservatively. prudently,
and soundly.