Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-01-26
STREET IS UNEASY
Conditions Cause Stock Trad
ers to Entertain Fears.
OUTLOOK FOR DULL YEAR
Banking Opinion Leans to Theory
Business Will Not Be Good.
DECISION CAUSES ALARM
Promotion Stock Must Be Made Good
in Treasures Of Corporations,
Says Supreme Court.
OUTLOOK FOR DULL YEAR
DECISION CAUSES ALAT
BY w. G.. NICHOLAS.

is covered with pimples and it's blood is
full of malaria. Nothing seems to go
| right. The excuse for declining prices
for several weeks was primarily the
Balkan-Turkish war That threw the
financial centers of the old world into
| state of Observation-Disclosures and a great
mass of American stocks was thrown
back on this country. That was some
thing tangible and justifiably had a de-
pressing influence on Wall street. Then
came along the period of tight money
| caused chiefly by the demands for CROP
| moving purposes, although there was need
for funds on large scale to take care
Of the undigested European liquidation.
The next thing was the uneasiness caused
In foundation quarters by the tariff agita-
ton. There followed a fresh outpouring
| from the lips of PreSident-elect Wilson.
| we next began to hear of letting down
in industrial activity in many unexpect-
| ed quarters. The greed Of copper miners
| to get the big profit in 17A-cent metal
| resulted in resumption OF overproduc-
| ton, and finally a break in the raw ma
terial down to 16 cents-a fact which was
| heroically denied up to within the last
few days. All Of these things combined
to depress the general stock market and
| nothing seemed able to restore confidence
in the stability Of values, and now after
two months of heaviness and lack Of con-
| fidence the situation seems no better.
| It Is remembered that there was sea-
son of declining markets just about this
time last year. and that revival did not
begin until well along in February.
Money was cheap then as now and the
situation was full Of gloom and disap-
Ipointment because of the non-continuance
of industrial activity which began few
months before and came to a humiliating
| finish around the last of December. 1t
| did not revive until late in the spring.
IL, 1~okx< to- f1n.iv,
| foundations than they were a year ago.
| Then the order books of the manufacture
| ing corporations showed business ahead
for only a short time. Now they are
full up for six months more, although
new orders are smaller in volume than
they were down close to the end Of 1912
A year ago there was almost nothing to
go on and feeling of gloom and distress
over the outlook was everywhere prev
alent. From strictly business view
point the situation is infinitely better
now than it was then. although the pros
poets might be improved in a great
many particulars.
Fear Dull Business Year.
Banking opinion leans to the theory
that we are going to have a dull business
year in spite of all previous rosy prophe-
cies from the same quarters only few
short weeks ago. The fact that wholesale
AZ per cent for a full year ahead is the
strongest possible proof of how the bank
ers feel. If prospects were anywhere
near as good now as they were two
months ago there would be no large sur
plus available at any such low rates.
Long time money at Az per cent on stock
exchange collateral looks good, however,
to bond makers and bond statesmen. They
see in that condition a chance to dis
tribute the large issues which had been
,nInr ha harrj,,
ming of the year has been larger than
any previous January, and flood of new
stuff is likely to inundate the financial
quarter between now and the 1st of
| April. Even with that fact before it
would seem that conservative borrow
| ers are not quite SO hungry as they were
a little while ago. Political and other
disturbing factors have clouded the flu
ture again with uncertainties and tend to
make the fnancierS cautious Men who
are intrusted with the management of
| big business are slow to incur additional
huge obligations unless they see their
way clear to take care of them. New
| Indebtedness means additional eXpendi-
| lures for interest account, and the care
full borrowers hesitate to take on new
burdens in the face of doubts as to
whether the promise of increased income
can be carried out. Disappointing as it
| is the admission must be made that the
promise of recent days has been modi-
| fled. In the opinion of many. who are by
| position and standing, well equipped to
| form judgment.
The formal ending of the Turkish
Balkan war was the occasion of a two
day rally in the stock market this week.
but the Improvement did not hold. There
was no real vigor behind it. The advance
was caused principally by the buying for
account of the bear party, which felt it
had oversold itself and had better take
profits. The amount of this profit taking
was large. as the professional element
and many quiet operators of substance
had gone short and were advantageously
placed for Il play of that sort. 1t does
| not appear, however that the market
situation was improved by the rally. The
short interest was cut down to safe linn
It's and there had been comparatively
little new buying. Despite insistent pub
licity to the effect that the outside public
had been absorbing good stocks on a
large scale throughout the decline it is
stated a fact, by those in IA position to
know. that the street is saturated with
Ions stOcks-that the selling has been on
a very much larger aggregate scale than
the buying. Prices may be dragging on
the bottom, as many market students in
sist but it is a cold. unpleasant fact that
to the average man the prospect is not
bright at this writing.
Must Make Stock Good.
A little paragraph appeared in the AS
ISOLATED Press dispatches Tuesday morn
ing which has caused considerable I'M
| easinesss among the very richest element
in Wall street. 1t seems to have escaped
public notice. but the kings Of high
finance are giving it a good deal of
thought. The paragraph was to the eff
feet that the Supreme Court had handed
down a decision In an apparently unim-
portant case appealed from the Lou
isiana courts, in which was enunciated
the principle that promotion stock must
be made good to the treasures of the cor
porations from which it had been taken
at par value. The disturbing talk circu-
lates through Wall street that there NAV
be period of enormous restitution of
moneys Illegally extracted from corpora
ton treasures by promoters and under
writing Syndicates.
1t is recalled that among other ex-
ploitations under this head was the lift
ing of preferred and common stock of
the United States Steel Corporation by
j. p Morgan and associates to the