The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1913-07-12
Situation Strongly Favors
Contraction Rather Than
Expansion in Any Line. :
WALL STREET NEGLECTED
Small Sales and Reeessions-Gas
Leads Local Securities-Earn-
ings and Gossip.
By 4. A. FLEMING.

ultra conservatism the work of readJust
ment that is going on every day is greatly
advanced, whereas speculative expansion
activity in securities, or enlargement o.
business ventures at this time cannot b'
considered other than as possessing ele
ments of danger.
People who do not take Wall Stree
seriously may wake up one of these day.
and learn that the street is the closest
observer of actual conditions; that it dis
counts ahead of facts nine times out Of
ten, and while occasionally affected By
a fake rumor. is more often acting or
fact rather than heresay or rumor.
There seems to be a general impression
that there is too much legislation. James
]. Hill voiced IL with the suggestion OF a
ten-year adjournment of Congress: Henry
Watterson emphasized il in his July
speech when he declared that courts were
bein~ confused by too much legislation
and Vice President Marshall turns from
speechmaking to make practically the
same declaration.
Capital has been the victim of some
strange rulings. Great influences In the
upbuilding of the commerce and industry
of the nation have been condemned. IT
mas come to the time when any one of
the 500. more or less, members of the
House and Senate may obtain permission
for a probe of almost anything. whether
il W. Misses developments or not
The Stanley investigation disclosed no
fact concerning the United States Steel
Corporation that was not public property
before the first hearings. Mr.. Pujo and
his committee Were determined to I'M
earth. but they produced nothing new. as
the result of their long and expensive
probe-but they cost the government and
corporate and private interests much
cash
Fear New Laws.
1t is a fact that business men fear for
the laws of tomorrow. They may be
doing something today that will be made
Illegal tomorrow: they are up in the air
on many things and are therefore deter
mined to go slow pending the readjust-
ment and the full effect of tariff Iegis-
lation and of the tinkerinS with the cur
rency and other laws. Commercial prac-
tees of years are threatened with ex-
tinction by law.
Stocks are low, naturally, but there
isn't the slightest reason to think that
they will recover old figures until rail-
roads pass through the readjustment Pc
riod, find a way to take care of their
maturing obligations, and have once
again established themselves by conserv-
ative management and economical oper-
alton in the confidence of the people.
Even Their the prices as of the good old
days" may look far, far away
And labor must be counted in.
Wall Street has lost great leader one
whose hand steadied. whose mind faith
omed the situation and the remedies bet
Ter than any who preceded or who will
come after for years. at least, even If
his equal as a master mind in financial
and security matters again develops.
Wall Street knows its loss-so does the
financial world.
OF the hundreds of millions of dollars
Paid out July /. reinvestment has claimed
but small percentage.
The public recognizes what's going on
and it is well that it does-it makes the
work so much easier. The fewer the
disturbances. the better.
Contraction Going Up.
This contraction is going on every
where. Europe is in the midst of it. the
city and the country merchant know
that wisdom suggests going slow and
contracting credits. Wall Street is in the
dumps of dizziness, but it rather well
comes quiet after much thrashing of
wormwood and ashes-so much quaffing
from bitter cups.
We may emerge from the present sit
uation to the light the better for the
lesson. Conditions are not distressing,
business is fairly good in the essential
lines, crops are maturing; there may be
no more damage than has been sus-
tanned, but if this to be desired is ma
terialized il is going to be accomplished
by keeping credits restricted-doing bust
ness carefully and without expansion
And then danger will be avoided.
There will be no more Harrimans
Probably no more Morgals. Men who
dared will be succeeded N the future
by men who will be just as careful as
these were daring: only bears dare these
days and they are becoming afraid of
regulation and are growing more con-
sentative.
RandOlph's Comment.
Time money over the end of the year
loaned at per cent and is six bid on
high-grade securities and at present
none in sight This fact is worthy of
consideration, in view Of call money lend
ing at IA and 2 per cent. and the dis
tressing conditions. in the bond market. |
1t means that American business men
and financiers have lost confidence and |
want their resources in cash. and il |
will be a long time before any con- |
structive development is undertaken. All
this in the long run must have its effect
on labor and legislation. The policy of |
the politician, anything to catch the Ia
boring vote, is turning out to be a |
boomerang.
Slowest Day of All.
Yesterday was about the slowest day
on the Stock Exchange of the year Many
stocks did not show on the ticker; the |
little machine worked occasionally, but |
it rested much. the second and third |
hours Of the session there wasn't enough |
doing to keep the board markers inter-
ested Up to noon 5000 shares were
traded in; 1900 in the second hour; in
the third a few thousand, and up to 2
O'Clock but a,10o shares.
quarters and eighths for expense money.
Private wire houses did nothing.
That the bears did not make a play for
lower prices was due to the fact that
lower prices no longer bring out actual
and would but increase a line
Of shorts already too big for the comfort
of the shorts.
And 1t was not at all surprising that
the street did nothing but draw its
breath.
The European situation, admittedly Sc
rious, was further complicated. A sensa-
tional story was given circulation in a
New York publication-serious, IL true.
From Washington came reports of almost
any kind of lawmaking against the meth
Dds of marketing crops and securities ,