Evening star., 1911-08-13
WALL STREET Blue
Spectators See No Hope in
the Immediate Future.
BANKS WILL OMIT PANIC
But They Cannot Put Prices Back
to High Level Notch.
CROP REPORT HARD BLOW
Largo Shortage Gains Leave West
ern Roads in an Ugly Hole.
Too Many Bond Issues.
BANKS WILL OMIT PANIC
CROP REPORT HARD BLOW
By W. G. Nicholas.
orresponden>s Of The star.

Special Correspondence Of The Star.
NEW YORK, August Il, 1911.
Stock market values have been under
going harsh readJustment for q matter OF
three weeks. Whether the process is
completed is q question Of doubt. The
later stages OF the shrinkage were
marked by prectpitate breaks. and the
entire decline has now reached q level Of
to 16 points below the quotations ruling
about three weeks ago. The changed
conditions were described In these letters
before the decline commenced, and 1t was
set forth with almost prophetic accuracy
what has since taken place in the mar
ket- Stocks had been bulled on a cam
paign OF sunshiny predictions Of returning
prosperity and q general revival Of activ-
ity In every department Crops were to
be record breaking. and everybody was
to jump In and help push the machine
along. AS 1t turned out. everybody wait
ed for the other fellow to do the hard
work and there ensued a period Of stag
nation. Heroic efforts were made to stir
up business and to maintain stocks at the
high levels.
Disappointment over the nonfulfillment
Of hopes and expectations has been chief
ly responsible for the heavy liquidation
Of securities which has been in evidence.
Short selling on an extensive scale helped
the downward course OF prices but that
alone would not have been sufficient to
have brought about the shrinkage. On
three or four separate occasions whole
sale liquidation broke through the levels
made by speculative selling. The support
given by short covering and profit taking
for bear account only caused slight raj
lies followed by renewed selling for long
account. Foreigners who had loaned
heavily on American securities started the
ball rolling by calling in their money.
One dashing operator with a big follow
ing was chief sufferer by reason of the
anxiety Of his foreign bankers to check
his imprudent operations. He is now be-
heved to have been long between 100000
is said to have reduced this line about
two-thirds, and to have been obliged to
part with big blocks Of Steel. Union Pa
cif1c and Southern Pacific at private sale
several points below the ruling quota
tions.
Bonds Are Undigested.
The great menace and handicap to the
market. aside from the overwhelming
sense Of disappointment. is the fact that
banks and underwriting syndicates are
loaded to the guards with q mass of
undigested bonds. A flood OF this class
Of securities. issued since the first of
January. remain undistributed The
manufacture of bonds and stocks was
though the public appetite for them could
not be appeased, and 1t was not until
many hundreds Of millions Of dollars
worth had accumulated on the hands of
underwriters and wholesale bond dealers
that there was an awakening. The stuff
Is still unsold in great blocks. and it
hangs over the general situation.
1t Is this which is giving the banking
and money combination more uneasiness
than the decline in stocks. Bonds are
The public has never learned to speculate
in bonds as in stocks. The stuff has
to be showed out over the counters of
banks or through the distributing ma
effort or canvassing organizations. 1t
has been uphill work for months and get
ting harder every day. 1t has become
impossible to find a market for the new
underwriting except at concessions, and
usually at prices below the figures at
which subscriptions were made. Banks
and trust companies have a world of
money loaned on stocks, but not as much
in bulk as on bonds. Bankers are not
advertising this fact. but they admit 1t
in private conversations.
The government crop report was the
sensation OF the week. 1t confirmed the
very worst reports that had been circu-
lated about the condition of wheat, corn
shows yield and expectations of yield in
the three cereals named Of about 9OO, Co.,
600 bushels less than last year. although
the acreage seeded was 6.O00.OOO acres
moro than last year. Corn has dropped
back to a possible 2,6OO. 600 600 bushels,
or 500, 100000 bushels less than last year
and $4,000. 900 bushels below early ex-
pectations. Oats falls 400. 100000 bushels
short OF last year: wheat Is about the
same, with over 100000 acres more
area. This Is terrible setback to those
who have been basing their strongest
hopes on bumper yield in the west and
middle west. Every other crop on the
list. with the exception Of cotton, suffers
likewise, and the outlook is for another
year of high prices for consumers, upon
whom the real burden must eventually
fall.
Western Roads Hard Hit.
Western railroads have been and are
being called on to carry the chief end OF
the loss. so far rs It is tonnage propo-
sition. To add to their grief. they are
now threatened with q strike for higher
wages for shopmen and machinists. as
we'll a. embarrassment and loss result
Ing from orders by the interstate COM
merce commission to reduce intermoun-
tain freight rates and to postpone rate
advances on cattle. Altogether, the west
ern roads are up against II. and the won
der 70 there has not been . heavier break
IN tho prices Of their stocks In Wall
street. It ID not unlikely that still fur