The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-06-26
FINANCIAL NEWS
AND COMMENT
Stock Market list Bears Up
Well Under the Claflin
Failure.
ACTIVE EARLY SELLING
Close Weak at Low Prices of
Day-SOme Speculative
EndeavOr.
ACTIVE EARLY SELLING

had to contend with such n depressing
development an the recevership to which
tho II. y. Clafiin Company had to re-
sort because of its inability to meet un-
der present conditions OF business rather
abnormally large obligations accruing
this month. II Is recognized that the
confessed embarrassment of the company
is preparatory to a readjustment Of Its
finances and reorganization of the affairs
Of the various concerns with which 1t was
allied. II Is understood also that the
United Dry Goods Company and the AS
ISOLATED Merchants Company and their
subordinate enterprises are not to be re-
garded as involved in the Ciafin COM
pany failure.
Furthermore. energetic steps have
promptly been taken by banking and
business interests to provide whatever
assistance may be necessary to prevent
an unnecessary spread of difficulty on
account OF the Clafin company troubles,
and II Is hoped that bankers and business
men everywhere will realize the excep-
tional nature of the Clafiin failure so that
It's distressing aspects will not be per-
mitted to promote an unwarranted dis.
turbance OF other positions Nevertheless
the misfOrtunes which have oyertaken
the present organization of a dry goods
| business that has for half century
ranked high In the trade and in financial
circles constitute very real calamity
which could hardly be expected 10 have
other than some further adverse conse-
quences, however limited they may be.
The records of mercantile mortality are
hardly likely to disclose a single collapse
of similar proportions.
The Clafiin company was the concern
mentioned in the indefinite rumors which
began to circulate on Tuesday to explain
the increase of selling pressure on stocks
and the marked decline OF prices. 1t was
revealed yesterday that there was on
Tuesday night almost no prospect what
ever that failure could be averted. Bank
ers had for severu days been going over
Clafin affairs and had discovered that
they were In "A state which, under the pre-
vailing circumstances OF the credit market.
made it practically impossible to render
anything more than a help. which would
be as brief in its effects as 1t would be
futile. The only way out seemed to be
| to place the matters under the care of the
| courts for the protection OF equities.
Various causes are alleged for the
action which had to be taken. but they all
| come down to this that the financing OF
the Claflin company and the two dozen
or more stores more or less dependent on
IL throughout the country had for years
| been done chiefly by the sale of Clafin
paper to country banks, where II was
held in great esteem; that the country
bankers of late months had been making
an increasing curtailment OF credit in all
directions. one inducement being the potion
which prevails among the interior bank
ers that they must put themselves in liquid
shape for the transition to the Federal
reserve banking system. and that through
| the wide credit market which the Clafiin
/ unp nd - ha ant
In recent years 1t had become very much
| overextended.
When pressure was applied for the set
Element Of obligations, and recourse could
| not be had to renewals Of notes or a
| replacement OF paper. trouble was bound
to ensue. These are the principal facts
summarized, which show a situation that
is altogether too peculiar to warrant the
assumption that 1t is representative OF
business positions generally.
| Possibly because of the circumstantlal
rumors OF Tuesday the announcement OF
the Claflin receivership did not administer
a severe shock to the share list There
was very active early selling move
ment under which prices declined. but
late in the forenoon stocks steadied, APP
parently in response TO some effective sup
port. rather nervous interval followed
OF relatively fitful trading, but in the
last hour there was an all around offer
ing of stocks which seemed to combine
both genuine liquidation and a consider
liable amount OF speculative endeavor The
close was weak at the low prices OF the
day. with a large array Of losses ranging
from / to points or more in all the
| ordinarily active issues United Dry
Goods preferred sustained a net decline
of II points. Total transactions, although
we'll under a half million shares, were
much the largest in many weeks.
/ 10 fa1 ~ ha auancial affacfa n
the Clafln failure will be as pronounced
| as its commercial reactions. The extra
ordinary liquidated condition OF the stool
| market should operate to limit the re
| Election OF even such a spectacular com
mercial catastrophe. and IL the bankers
OF the country keep their heads the com
mercial disturbance should be limited. /
may be said OF yesterdays stock marke
that 1t acted on the whole rather well
| considering the various disappointment
| which Wall Street has had 10 resist re
| Gently and the lack OF encouragement from
political quarters for the maintenance o
| constructive attitudes II secn-i extra
ordinarily inappropriate that yesterday o
| all dayss dispatches from Washington
| should contain another fnstalment of pratt
tie about the business beneficence of Ad
ministration policies. Although the Owe
Stock Exchange bill was finally reporte'
| by the Senate committee which had II II
| charge 1t Is a question II Congressional
| willingness to surrender to the Admins
tration programme and enact any impor
tant piece OF business bearing Legislation
has been intensified by the plain indlca
lions OF the strain from which the bust
ness world is already suffering.
Foreign advlces were cheerful In respec
to the further remarkably rapid improve
ment OF central bank positions. The Flu
ropean stock markets were dull and NOR
or less inclined TO heaviness and SCENE
somewhat affected by the news from thi
side. Foreign exchange receded moder
ately again and seemed TO show NOR
clearly that gold exports were probabl
completed. for the time being anyway
An interesting reflection OF the chief tier
OF financial information was the practice
disappearance OF a commercial paper mar
ket. Quotations were more or less nomi
nal, but this is a condition which IL hardl
likely to last beyond evidence of the flu
extent OF the Clafin troubles. Some NOR
bad railroad statements were made 10
May. notably that Of the Southern Pa