The Washington herald., 1911-01-02

TO say that the rovfewS OF the Stock mar
ket and Of financial and business condi-
tons in 1910 now about to be- multitude
nously published by the newspapers, will
not be read with as much interest as on
previous similar occasions. first, perhaps.
because the facts Of the existing situation
and the financial history Of the last year
have been 50 thoroughly turned over and
thrashed out in public discussion IN the
long period of recent stock market dull
ness that they have become rather stale.
Everybody knows now that the stock
market and the country's financial con-
Germs as a whole entered the year 1910
in a state of strain.
The boom in security prices and in gen.
eral business really eliminated In Au-
gust Of 1903. and during the fall months
Of that year. although the stock market
was very lively and gave an appearance
Of great strength, 1t really did not make
progress upward. At the end Of the year
the feeling was widespread in the specu-
lative community that 1910 would be a
time Of exceeding prosperity and Of ad-
vancing markets in all directions. The
conviction was not shared by conserva-
tive banking interests, whose more care
full study Of the situation led them to
understand how slender were the grounds
upon which tho popular supposition
rested.
They knew. for one thing. for instance,
that a small number of rich professional
spectators, who were nevertheless nov
ices at the speculative game, were bor-
rowing enormous sums Of money on huge
blocks of stock for which in reality no
market at current prices could be found
In the very early part. therefore. Of 1910
there was a collapse of this specific spec
ulative movement One or two men in
particular. who. although possessed Of
large means. were found to be carrying
much greater quantities Of stock than
they should. were forced to unload. The
downward movement in security prices
which started shortly after January !,
ran. although with numerous interrupt
tions. until the end Of July, when it cul-
minated in crash which left prices of
the prominent industrial and railway
stocks from so to $50 a share lower than
they were when the upward movement
ended in August of the preceding year.
The market weakness was accompanied
too with a gradual although in no way
panicky or violent letting up in general
business.
Peculiar Aspect of Slump.
There was one peculiar thing about the
conduct of affairs as thus displayed in
the fore part OF 1909. This slowing
down would probably have come any
way from purely natural causes: but 1t
was slowing down that did come, in
fact. from deliberate efforts made to-
ward that end by banking and other
financial powers. The men in control Of
the large financial institutions of the
IN xtn 20
not, indeed. at the end Of the preceding
year, that the credit position Of the coun-
try was in such shape that il could not,
without decided amelioration, pass in
safety through the exigencies sure to be
felt during the crop-movfng season Of
1910
Even in strictly speculative circles in
Wall street a common remark heard last
January was that while there would
probably be a bull movement in the i'm
mediate future yet everybody must look
out for trouble in the fall Of the year.
The event proved the truth of the maxim
time and again exemplified in financial
history that adversities that everybody
Is looking for and against which proper
preparation is made oftentimes do not
happen at ALL
The scaling down Of loans and the
financial liquidation that took place, es-
pSSidhy III Tic west, WNeTe cEeQlC oN-
pansion had been most pronounced,
We're such as to carry the country
through the stress of crop moving with
out any financial difficulty whatever. It
was the first time in years that such a
phenomenon was witnessed. On too
many occasions in the past the policy Of
banking interests has been not to take
thought of the future, but to let a specu-
lative movement go on unchecked until
it reached stage where a convulsion
was necessary to cure il.
In 1910 the eyes of every large banker
In the country were from the beginning
OF the year fixed upon the possibility of
disaster in the autumn, and because of
this there was no disaster. Since the
1st Of August the tendency Of the stock
market in the main has been upward,
although the advance has been restrained
at all times by the knowledge that for
the moment the only substantial reason
for the rise was that a normal reaction
was justified from the sold-out and over
sold condition in which the market found
itself at the end Of the first half of the
calendar year.
Situation Not Ripe.
The situation swas not ripe for a sus
tained or prolonged advance, and specu-
latOrS who aftempted fo 0ot NJ. ~