Evening star. [volume] (Washington, D.C.) 1854-1972, 1912-09-29


commitments contracts to deliver stoc IS
sold by spectators who do not already
possess them) mount highest
Among railroad stocks this is conspicu-
ousiy true as to st. Paul. wherein an ina
portant Standard Oil interest was sup
posed some time ago to have met with
discontinue. st. Paul directors. enamored
OF the developments in its far western
territory. which by leaps and bounds
rushed to maximums undreamed of Went
ofhand by wholesale into new branches.
extensions. construction liabilities of tens
OF millions upon tens Of millions-anticf-
pated returns coming slower than counted
upon-wlth the result that the main line
mas had to bear burdens where mama
was expected
Feeling of Professionals.
1t isn't at all strange that professional
wall street under such circumstances
should be persuaded that ST. Paul stock
was less prize than for the decades 1t
seemed to be. OF course, whatever bad
fortune was recorded had vast exaggera-
ton in the Wall street amplification All
this year the stock exchange has felt
sure that st. Paul would have to forego
dividends altogether, or at least cut its
rate down to the quick for the COM
pany official statements show that the
dividend 1t was paying was not being
earned. This nnearned dividend had to
be provided out of surplus accumulated
from earnings that had in previous sea-
sons been earned beyond what was paid.
But st. Paul directors. declining to fall
into panic. disappointed the prophets-5
per cent instead of Per cent being
regularly declared when the question last
came to official issue a fortnight or two
ago. Bear spectators insist that this
action only makes the st. Paul situation
Wprse-and upon this theory these bear
spectators not only stay short of lines
already sold. but have materially extend
ed their. commitments for delivery in the
future of what they do not now own
Somehow. however. there shows nothing
like inside liquidation. Such stock as
was to be sold upon bad earnings seems
to have been sold months a&o-recent
"sales'' being chiefly of phantom stock
which the traders have to borrow for de-
livery and which ultimately they must
buy back in order to complete their con-
tracts. =
St. Paul is quoted here merely by way
of example. 1t is By no means in class
by itself 1t typifies much that is show
ing In the security market situation just
now. 1t represents what forms the at
.titudc Of aggressive traders who feel
sure that market values are higher than
they should be. that setbacks and past
disappointments and past traffic losses
are urtwarrantedly ignored. 1t represents
also the fact that such traders are TAX
/. Ing into no account what has to do with
the future. AS a rule Wall street mar
kets are not based upon rule like this.
Not precedent but prospect has. ever
hitherto been the influence that domi-
mates.
Gratified With Future.
AS to the present and as to the future
there is no disagreement between bust
ness men who are intimately in touch
with conditions. Railroad managers of
the highest station were quoted in this
review a week ago in uniform expression
of qualification over the outlook, all
agreeing that we are to have q volume
of business practically unprecedented.
commercial and Industrial world-men
like John Clafiin, the merchant, and
Samuel Colt, the manufacturer-aver with
no qualification that We are entered into
an era of prosperity.
That money should be tight in Wall
street at the moment is in no sense
strange. 1t would be curious We're the
record otherwise. 1t is because-and only
Observation-Disclosures has hriSked up and
that the country's crops tower that the
banks are called upon for accommodation
so great as to make aStringent demands
upon current circulation Only a pessimist
who is a genius can figure out embar-
rassment in situation like this. The fact
that labor rolls expand and that raw
material requirements increase, the fact
that wheat and corn and every other crop
calls for more cars, bigger freight bills
the present fact that new goods and new
to have their passage paid-is precisely
as sad an argument for worry as would
be hysteria upon the part of bankrupt,
suddenly notified of an inherited fortune
trustee ready to turn that fortune over.
The entire bear campaign based upon
temporary money market activity is
comic.
May Be Something Significant.
Yet it is fair to recognize that when of
a sudden call loan rates rush spasmod-
cally to higher than normal figures there
may be something significant enough
therein not to be ignored
1t may be. as good many cool calcu-
lators believe. that those financial powers
who have most at stake and closest
knowledge of conditions are using the
market for money as means Of admOni-
ton to spectators who might otherwise
be carried by new enthusiasm into the
creation Of a market expansion and buoy
ancy that Is not yet quite seasonable.
Seven and per cent money for daily use
can be regarded as pretty strong leash
upon the start Of any upward money
determined is far different from the
working of a bear combine. With con-
ditions as indisputably they are. it is
going to be merely a matter Of timeli-
ness as to the beginning and development
Of an old-fashioned stalwart bull market.
Thrashing machines at work night and
day. moving freight cars damned with
produce factory wheels going at new
breakneck speed. are indexes ample-not
merely as to the re-establishment Of
good times-but they forecast and guar
antee what in the broadcast sense must
be good for the security market.
Anticinate Rai1wav Earn;noe
What may be expected to exert influ-