The Birmingham age-herald., 1912-03-03
SPICE INJECTED '''.'.. |NSTOCK MARKET Showed It Was in an ssOver-
 sold" Condition # THAT STEEL PROBE McRae Report Developed Little Not Already Known-Belief That }
 Roosevelt Will Fail |
 and Bolt
 
By w. G. NICHOLAS

New York. March 2-CSpecial. )-Spice was injected into the stock market this
 week. There was plenty of news aioat to
 interest the speculators. Some of 1t was
 effective. but in most cases 1t was with
 out influence. although productive of sur
 face excitement and noise. For one thing.
 the developments of the hour Induced
 some of the big plungers to get busy and make a demonstration, the first that
 has occurred in many weeks. A feature N<lch was revealed by the outburst of en-
 ergy on the part of a few of the high flyers on the exchange was that the mar- ket was in an 'oversold' condition. Spec ulation had been dull for a long time, and it is the habit of traders to mistake a dull market for weak one. Despite the small volume of aggregate business day by day, it was possible to expand the short interest until it had assumed really unwieldy proportions. The short sellers had no difficulty in borrowing the active stocks with which to make deliveries. and
 before they Knew 1t they had sold them selves into hole. It only needed It, tio aggressive buying on the part of a few of the leaders on the floor to bring to light the real market situation. Prices | jumped at lively rate for a day or two.
 and before the advance eliminated. quo- tations were up 2 to 5 points. There seemed to be no real basis for the im- provement, however, and hopes of a big bull movement were confined to a very few. The market furry was very general ly described as small sized bear panic very small sized. in point Of fact. Under | lying conditions are not generally con- ! strued as being permanently bullish,
 There was nothing actually new In the report made to the Stanley committee by its expert, McRae, about the steel trust, although 1t was interesting even to Wall street to have the records of the big corporation presented In concrete form, and by authority. It made a juicy mor | sel-the statement that J. P. Morgan & | Go. had cleaned up almost S70,O000O0 on the original Notation. It would have add ed to the interest of the disclosure if the l names of the underwriters had been given l to whom about $55,0000o0 of the amount had been distributed. Of still more vital interest would have been another section of financial history connected with the trust which Mir. McRae omitted and which the Stanley committee has not yet under taken to dig into, viz: the colossal spec ulations of some of the "inslders" in the stock market. Possibly, however, the stan ly committee has considerably left that
 part of the investigation for the money
 trust committee to inquire into. Indeed,
 1t is understood in Wall street that the new committee will take up this branch
 of the subject and insist upon knowing
 to what extent insiders are privileged to use the funds of their corporations to work the stock market, and personally
 profit by foreknowledge of corporation af- fairs of their own making or control. It ts,- I--I Ix-a tice Is for favored insiders to be allowed
 the use of company funds deposited in cer-
 tain trust companies and banking houses.
 such moneys to be used as margins on speculative accounts.
 Only feeble denial has been made that this Is the common practice, and it is within the power of Congress committees to either prove such to be the case or to show that the charge is mnfounded. If the oft repeated claims that huge sums of money are being improperly used in the manner described, or If the whole story is a libel on the street, the entire facts should be known. The notoriety and ad- vertisement connected with deep probe of that sort will of course be unpleasant to Wall street, but 1t will give the public It's first clear and authentic insight Into the background manipulations which has been disgrace to Wall street for many years. What is needed is more light turned In upon the dark places, and it Is amply within the power and province of the new committee created in Washington to do just this thing. It will add to the gay ety of the financial district, and will give the general public something to talk about inteligently as to what Is going on in the inner circles of high finance.
 The McRae report gives official con firmaton of statements about the earnings of the Steel corporation, which have ap- peared in these letters from time to time It shows that for nine years the gross proceeds of sales to "the outside" was S3, 569, ,0O0,000 intead of s5,424000,OO0, as shown in the published reports of the company. The difference between these two amounts represents the bookkeep- ing juggle, the purpose of which Git is charged) was to make the percentage of profits appear smaller than was really the case. It looked better for $1, ,1O9, 900 900 to have been earned on a total volume of about $5,500. 0000O0 than on 8, ,500, 600 900. A net profit of better than 90 per cent on to- tai sales might not make a good impress sion, and we are going to have it all threshed out again during the next few month of political agtation-all of which will have Wall street and stock market bearing.
 It will be idle to say that Wall street
 is not taking a lively interest in the cur
 rent developments in the various cam
 paigns for the presidential nomination
 The opinion grows that MT. Roosevelt
 will be defeated in his ambition to ob-