Evening star., 1911-08-27
BULLS LOSE NERVE
As a Result, Stock Market Is
in the DoIdrums.
STOCK FROM THE INSIDE
Street Trying to Fix Responsibility
for Liquidation.
DENIAL BY STANDARD OIL
Members Of That Crowd, However,
Had Advance knowledge Of
Coming Slump.
STOCK FROM THE INSIDE
DENIAL BY STANDARD OIL
By W. G. Nicholas.
special Correspondence Of The Star.

By W. G. Nicholas.
Special Correspondence Of The Star.
NEW YORK. August g. 1s11-
The bulls have lost their nerve and the
stock market is in state Of nervous dol
drums. The big bull pools are still alive,
however. and whenever the short interest
gets big enough to make it worth while for
the bull leaders to give 1t a trimming.
prices are Jumped and there occurs a lit
tie bear panic. This performance has
been gone through with two or three
times since the decline started in about
| a month ago.
From appearances, liquidation has not
yet run its course, and the common be-
lief In Wall street is that the general
level OF quotations will go considerably
lower. Liquidation has been on a very
much larger scale than most people In
Wall street are willing to admit. and it
is still in progress. Where it will end
and when nobody is prepared to say, and
one guess is about as good as another.
Market conditions are distinctly un-
favorable mass of inside stock which
has been coming out for several weeks
remains In an undigested state 1t is
passing from one set Of buyers to an
other. and the tendency is Enthusiastically
downward The big people do not ap-
pear to be particularly interested in
checking the decline except at periods
when the market is threatened with de,
protect the situation as q matter OF self
preservation. and incidentally they levy
an assessment on tmprudent and reckless
bears who gain courage with every point
additional decline and pyramid their ac-
counts. This Is one OF the bear markets
that is likely to leave the short sellers
49, 80 ho ,lrJr,oy
than they had at the beginning. Know
ing the strength and market skill OF the
great leaders, bear gamblers hesitate to
commit themselves until they see break
under full headway. Then 1T Is either
too late or the chance to make killings
has been reduced to q minimum
Street Looking for Seller.
The street is now engaged in an earnest
effort to find out who started the heavy
liquidation and who the heavy sellers
Of long stocks have been 1t Is known
that great many weakly margined
accounts held by the general public have
been wiped off the books, but that does
not explain the massed liquidation. In
siders were the large holders up to the
last month or two, and the inference Is
plain that the goods must have come
from that source. The interests made
a heroic effort to bull prices. to a higher
level before beginning liquidation but
finding it impossible to interest the pup
lie at the quotations established on the
| July bulge they began unloading any
way, satisfied to get the best they could
and selling on q down scale instead OF
| an up scale, as they hoped to be able to
do
The Standard Oil party is believed to
have been the heaviest inside seller Off
oials of the Standard Oil corporation have
been at pains to deny that the company
has sold stocks, giving as a principal rea-
son the fact that 1T had no stocks to sell.
This statement is commonly construed as
a technical denial and does not cover the
operations of the multi-millionaires who
| comprise the Standard Oil party and VINO
are known to have held a bear1sh attitude
on the general situation for many months
past In proof of this, it Is mentioned
sub rosa that one of the junior members
of a ruling Standard OIL family got short
10000 shares of steel common as far back
as last spring. standing by his account
through a rise of nearly 15 points, and
then adding thereto when steel crossed
so on the rise. 1t is argued that the
youngster would not have taken that
formidable risk unless he had known
what was going behind the scenes,
how the elders in the Rockefeller coterie
felt, and what they intended to do. The
reasoning Is logical and events have
proved that the young man knew what
he was about and was not troubled with
ton. He simply had to stand pat on the
short sales with advance knowledge that
he would be winner in the long run.
Drag on the Market.
Reference has been made in these let
ters frequently to the fact that the rail-
roads have put about $5O.OOO,0OO annual
interest charges ahead Of stock dividends
by issues Of bonds during the last year.
and that ultimately this drag would be
an important market factor. Time is
proving the accuracy Of this forecast.
Statistics published this week show that
disbursements September l will record a
decrease of $2,OOO.OOO in dividend pay
ments and an increase of 81 500 900 In in
terest payments.
The issue resolves itself down to
simple sum in arithmetic. The Increased
interest charges are shaved directly from
the dividends Both are paid from earn
ings and the bonds have a prior claim
thereon. The $5O.OOO.OO0 annual addi-
tfonal drain on revenues amounts to
about three-quarters OF I per cent Of the
entire share capital Of the railroads Of the
United States, an item that must be taken
into account and from the consequences
of which there Is no escape. All OF which
may explain to the superficial observer
what now appears to be q mysterious
behind-the- curtain cause for liquidation
Those who are accustomed to delvtng
deeply in their search for reasons for
market action knew that ultimately there
must be q strain on dividends which
would compel q scaling down Of dstribu
ton to stockholders unless business might
lily improves. and business is not i'm
proving. 1t has not been improving for a
year or more. and 1t does not seem likely
to improve to any material extent for an
other year or more-probably not until
after the next presidential election.
Political Opinion Divided.
Opinion ID. Of course. divided as to the
wisdom Of the President In not meeting
the democrats and insurgents half way
In their program to relieve the country
Of the distress and uncertainty incident
to q protracted agitation over tariff revi-
sion
However, the veto messages are In and
Congress has adjourned, leaving the
country confronted with a full knowl-
edge that business must move blindly
until Washington acts ON the tariff issue.
whether that be at the regular session
Of Congress or at the regular session
which will follow the election in the fall
of 1912. 1t Is a big problem and the un-
certainty OF 1t is making men OF affairs
cautious and unwilling to embark In ex-