The Stock Market’s Recovery

     Fears that the stock market would undergo a decided speculative disorganization because of the death of the nation’s chief magistrate at the hands of an assassin have happily proved to be unfounded. The first news of the crime committed at Buffalo was received a fortnight ago. It at once produced a decided decline in the stock-market prices on Saturday, September 7, and the following Monday, a de- [594][595] cline which was, however, arrested by the early favorable accounts of the wounded President’s condition and prospective recovery, and by the effective support which the large interests of Wall street [sic] extended to the market. As was pointed out in these columns last week, the banking houses and financiers connected with the management of railroads and other corporations, after buying their stocks to an extent sufficient to calm any extreme agitation in the market, apparently sold when the better tone created by the belief that Mr. McKinley’s life would be spared to his country brought in renewed buying on the part of the public here and abroad.
     These powerful interests were consequently in a position to extend renewed support to the market when the unfavorable nature of the illustrious patient’s case developed on Thursday of last week. Hope was reduced to a minimum on the next day, and the market discounted the extreme probability of the death of the late President and a change in the executive department of the government by a general but not unduly severe renewed decline in prices. On Saturday, when the worst fears had been realized, the Stock Exchanges both at New York and London were closed, and thus the market and the financial public were afforded time to take a calm view of the situation created by the change which the death of the President and the accession of his successor involved.
     As far as stock market tendencies can exhibit a consensus of opinion on the part of the financial world, the indications of the present week have been favorable. On Monday last the London market set the example by quoting prices for American securities, which averaged from three to four points above the closing prices on the preceding Friday. It was by no means a boom. On the contrary, the evidences are that the people who had sold stocks on the fear of complications arising from the death of our President and the assumption of his office by another, repurchased their holdings, while operators who had sold stocks short as a speculation, or, as was largely the case, as a protective “hedge” against their holdings of other securities, made haste to take back such contracts. A powerful element in producing this marked and very gratifying change in the temper and position of the market was the conservative attitude which was promptly assumed by Mr. Roosevelt on taking the office to which events had called him. The announcement that his predecessor’s policy would be maintained, and that the members of the old cabinet would remain as his official advisers, went far toward reassuring the whole financial public and changing direct and incipient general bearishness into a feeling akin to confidence. The sensitive position of the market in relation to any possible political change is illustrated by the fact that when on Tuesday mere newspaper discussion as to probable alterations in the composition of the cabinet was heard it produced a sensible chill in the temper of Wall street [sic]. Fortunately such ideas were set at rest by further explicit declarations from Washington that the new President had practically insisted on the cabinet’s retaining its original composition. The dullness which settled in Wall street [sic] on Wednesday may be attributed in a large degree to the feeling of sadness which prevailed in all departments of business throughout the country, and which was accentuated by the national day of mourning and entire suspension of dealings in the great marts on Thursday. Yet the dullness was accompanied by no evidences of bearishness or by indications of further liquidation. The stock market has, of course, to withstand the influence of a money situation which, even with the assistance wisely extended by the Treasury, might cause some pressure and lead to selling of stocks. The indications afforded by the stock market’s prompt recovery from the depressing effects of Mr. McKinley’s death are that it recognizes that no sensible alteration has taken place in the economic position of the country, and that the policy of the government will be on the same lines which have met with the approval of the business and financial community.