The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1911-02-05
STOCK MARKET
ENTERS NEW GROUND
Traders Take Fresh Courage
and Are Earnest Bulls
WATCH CHART MAKERS
Most Operators In Wall Street Are
FataIists-Condition Are Greatly
Improved Since the
Holidays
WATCH CHART MAKERS
BY w. G. NICHOLAS


BY w. G. NICHOLAS
New York, February 4.-The stock
market entered upon new ground this
week and that great mass of traders
who go on the theory that whenever a
market gets into new territory Chat is,
establishes higher or lower eduotations
on a movement up or DOWN prices will
go further in the same direction before
they stop-they took fresh courage and
became earnest bulls. Stock market
operators are more or less alloyed with
superstition.
Also they are more or less influenced
by the chart and either secretly or
openly believe that price movements
are governed by fixed rules which are
most clearly expressed by diagrams
showing the ups and downs of quota
tons for days or cycles. In a sense
they are fatalists. Old Commodore Van
derbilt had from three to a dozen spirit
ualist mediums and clairvoyants on his
staff and consulted them frequently.
Other great market operators have
The chart makers. however, lay claim
to something substantial in their work.
Like the horse race tipsters they have
back of them range of past perform
ances' to back up their predictions and
have built up great school of believers
or half-believers. Therefore when the
market made new ground this week
not only was the stronger courage in
stalled into the bull spectators, but
large numbers of converts swung over
from the bear side to the bull side.
On the high prices that were estab-
lished a host of stubborn bears were
forced to cover their shorts, either be-
cause of exhausted margins or because
they felt they had gone far enough.
The top prices we're probably made by
bears and when they got through buy
ing the technical position of the market
was greatly weakened. 1t no longer
had under it formidable open short
interest which is always regarded as
an immense technical advantage in the
successful conduct of a bull campaign.
Every commission house and broker
had a mass of stop loss orders to exc
cute on the buying side during the last
two or three points of the advance.
Naturally. after such an experience,
the market was due for a sharp reac-
tion and many experienced traders
looked for a break of or points from
high range. Such an occurrence would
be regarded as an entirely legitimate
development and would not shake the
faith of the multitude of traders in the
bullish tendencies of the situation.
Admittedly. underlying conditions
have greatly changed for the better
since the holidays. The return flow of
money to this center has put Wall
street in funds again and the big peo-
pie have been proceeding with the con-
fidence engendered by knowledge that
they could lay their hands on the
wherewithal to carry out plans involv-
ing large outlays. ~
Since the first of the year hundreds
of millions of dollars have gone into
bond fotations of one kind and another
and arrangements are either completed
or far advanced for an enormous ad
dition to corporation borrowings. AS
indicated in these letters, railroads
concluded not to wait for judicial and
Interstate Commerce rulings and de-
money where they could, relying on
their already known ability to provide
revenue to meet future requirements.
This proceeding goes far to neutral
ize and offset the claims they have been
making before the Federal boards and
through the press Of the country that IL
they were not allowed increased freight
rates they would go over the hills to
the poorhouse The occurrences of the
past six weeks make many OF these pow
erty pleas by railroads look ridiculous
The two big pieces Of news which
have been under discussion in Wall
street this week we're the Canadian re-
ciprocity treaty and the announcement
by the management of Union Pacific
and Southern Pacific of an intention to
double-track the system between the
Missouri river and the Pacific ocean.
This latter announcement was par
ticularly gratifying, as 1t means the de-
termination on the part of the controll-
ing interests of the greatest of all the
trans mississippi systems to go ahead
with the broad and patriotic construc-
tive programme planned by the late Mr..
Hartman.
Doubts were entertained as to
whether the new regime had the cour-
age or could command the resources
necessary for the work. 1t appears
tnat tney are equdl u tHe JoD VI put
ting through the splendid Hartman
programme. The action leaves the Har-
riman Pacific in the lead of the rail-
roads of the western empire, position
that Mr.. Hill was earnestly contesting.
The jump In the Hill stocks Is taken
as a reflection of the views of the great
magnate of the Northwest and of his
associates as to the benefits which will
accrue to the railroads on this side of
the Canadian line IL Mr.. Taft is able
to carry out his reciprocity theories.
The Canadian railroads do not share
in the buoyancy displayed by the lines
south of the border, and rumors are
heard in Wall street that the tremend-
Gus influence of the Canadian railroads
will be exerted against the concurrence
in the Taft programme. In spite of
the speedy ratification of the treaty
and of a special session of Congress be-
ing held to act on the measure If the
present Congress fails to come to the
scratch.
In this connection 1t is timely to re-
mark that for the moment there Is no
expression of fear as to the harm that
might result from the agitation over
tariff revision--for such revision would
surely be precipftated were the Presi-
dent to convene Congress In special ses-
sion. That possibility Is for the mo-
ment entirely ignored as stock
market factor or as feature of the
business prospect.
Z The bad showing made by the steel
company in its annual report turns out
to have been pretty we'll discounted.
The bulls on that property are Mating