Evening star. [volume] (Washington, D.C.) 1854-1972, 1911-07-30
Give Market Support While
Feeding Out Securities.
STILL LOOKING FOR BOOM
One Scheduled to Arrive in July Has
Not Materialized.
PUBLIC WARY OF MARGINS
Not Speculative1y Inclined, and It
IS Not a Good Time to
Find Bargains.
BY w. G. Nicholas.
al Correspondence of The Star.

By w. G. Nicholas.
Special Correspondence of The Star.
NEW YORK. July ~. 1911.
| The market got on new ground this
week. but had hard time staying there.
| In fact. it didn't stay there, except for n few
scattering speciaties, which are under
ranipu!ative control of pools more or
| less active. and more or less equipped
| with backing to run campaigns on the
stock exchange.
| Legitimate business being dull, owners
| of these properties laudably endeavor to
| make their dividends in the stock market.
| Wall street has been the meal ticket for
scores and hundreds of syndicates and
groups of insiders ever since there was a
| market for stocks in that neighborhood
Jay Could made the most Of his dividends
>on the stock exchange and accumulated
$s0.C00,O0O. which he passed along to a
patriotic bunch of children most of whom
have hung on to what they had and added
thereto.
There is scarcely a railroad or industrial
corporation on the list that has not at
some time or other been the foot ball and
plaything Of thrifty insiders. Even that
sacred white elephant. United States
Steel, has not been exempt from indict-
officers of the corporation amass fortunes
of 100000 to $25,OD,COO on their
salaries.
Lots of Stock for Sale.
On all the rallies there seemed to be
an oversupply of stocks for sale, a fea-
ture which was observable from the top
of the list to the bottom. In trying to
account for this phenomenon various ex-
plantations are offered. One of them Is
that the banks are seeking to quietly re-
duce the immense lines of stock ex-
change collaterals upon loans. and that
while encouraging buying by freely sup
plying money to borrowers at very low
call rates, they are with the other hand
handing out the goods in larger quanti-
ties.
1t is well known that the banks will
have to provide immense sums between
now and December for crop moving pur-
poses and that to do this they will have
to draw in funds from Wall street. The
banks are VIGOROUSLY overextended on
Wall street account and how to reduce
loans in that quarter without rutnOus
liquidation of securities is a problem that
is calling into play the best talent in
financial circles. 1t is true that the pub
lie is at this time the holder of a larger
aggregate amount of stocks than ever be-
fore in history. but those stocks are for
the most part owned outright. The pub
lie is not in the speculative game and has
not been for year or more
A very large so-called floating supply
is cling carried on capital borrowed from
the banks and trust companies by a
wealthy class Of clients who are in the
know and especially favored by the
financial institutions. They have been
used and are being used as a means for
| finding employment for funds that would
otherwise be idle. They are about TO be
called upon to return part of this money
for use in the west and south, where 1T is
needed for the harvesting and handling
of the crops.
Public Is Staying Out.
Just how this is to be done without
causing a bad decline in the stock mar
ket is the problem which is now con-
fronting Wall street. The chronic bear
party, which has been waiting for months
for this crisis, does not believe it can be
done, although up to this time the bank
ing interests have been able to hold the
| situation In absolute control
They may not have been able 20 get rid
| OF as many stocks as they would like to. but
they have held prices very close to the
| top figures reached on the advance, which
has been going on steadily for two Or
| three months. The public has refused to
be beguilded or coaxed into the market.
Wall street literature is loaded with bull
! ish statements and bullish sentiment.
Many Of the statements are misleading
and the sentiment Is either artificial Or
non-existent. There is a great deal OF
talk these days about the temperance in
droves of the odd-lot" buyers. This Is
a reckless miss:atement. Odd-,ot buyers
| as a rule are bargain hunters, and bar
gain hunters are not going into the stock
market on top OF rise and doing any
buying. These other people turn up after
| a slump and when the situation locks
ldemoralized. They have not been seen in
a
A great boom, which was to begin with
| the new fiscal year. July i, has not ma
| teriaized. There has been some Increase
| in the volume Of business in the steel AMI
iron industry, but there appears to have
| been a check in that, and orders now
being on very moderate scale with
slight tendency toward reaction. The
| steel trust statement of earnings for the
second quarter, ending June, was very
| artistic piece OF work. 1t showed $2S.-
100000 earned, as against SOB OOO0O the
| first quarter, a gain of about 81, 10000.
| II the second six months pan out as WELL
about $103,GW,G03 will be earned for the
| twelve months or more than $10,OOOOO0
shy Of the annual requirement. From the
headquarters of the trust rosy stories are
sent out for publication WITH regard to
prospects, but confidential talk is not SO
hopeful There is genuine expectation Of
| some Improvement over the present tu-
alton, but everybody is prepared to mo j.
| fly previous estimates, and the same holds
good in almost every line OF business.
Railroads Barely Keep Even.
| Railroads are barely holding their own
as compared with a year ago in the mat
| ter of earnings, Yet they will be called
| upon during the ensuing year to pay $50
100000 more in interest on bonded in
| dehtedness than they did last year, at
] least 1000 600 600 in rev bonds having
| been put ahead Of the stock. Il anybody
| can find a bullish argument on railroad
| stocks in this they must be of an eX-
ceed.ng cheerful disposition and optimistic
| FROM the core out. Railroads have used
part Of this S1.0oO,G00,cG0 to pay off old
scores, but they have very considerable