The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1870-08-08
FINANCIAL and COMMERCIAL.
WALL STREET. \
SUNDAY. August 7, 1870. !


THE WEEK IN WALL STREET.
The attractions OF the seaside and summer resorts
proved greater than those OF Wall street for the
great bulk OF dealers at the Stock Exchange. and
hence the business OF the week was sluggish and
moderate In amount.
Despite the inactivity In financial circles the tone
and temper OF the markets underwent gradual
change to cheerfulness and buoyancy-the result
OF tho reaction abroad In the prices OF
American securities That this reaction was
sure to come in the progress OF the war now exist
Ing In Europe was prOphesled emphaticaly when
the first signs OF difficulty made themselves mani
iest II Ia the Inconsistency OF spectators which Is
so often the secret OF their losses One OF the most
successful 'men or the street, owes his good fortune
to persevering IN whatever policy his judgment
told him was correct. He was accustomed TO
mark out his course for a future of several
MONTHS commit his money to his brokers and
give his instructions to the purchase ana sale OF
stocks, whereupon he betO0k himself to his yacht,
and, out OF sight and sound OF the Stock Exchange.
Would cruise the intermediate time away. On his
return he found his ventures almost invariably sue
cessfu. Now, had he remained at home. suffering
his mind to be bewildered and his cacu-
lations to be challenged by the numerous
intermediate fluctuations arising out OF the
thousand and one ruInors and theories con-
stahtly circulating and discussing in the gOssipy
precincts OF the Long Room, he would doubtless
nave FILTERED away his money In s'buyng when
stocks were high aud selling them when they were
iow'" me moral of the above might have been
| appied III more instances than one since the
break OF the present war in Europe. Those who to-
day are losers by the sharp decline which has visited
every department or the Stock Exchange have their
| own timidity and Inconsistency to blame. When it
first became apparent that war in Europe was
| threatened there was O popular and general
| proclamation OF the idea that such war
| would rebound to our benefit. How many proved
their sincerty9 That there should be at the begin.
ming Of such political crisis some fluctuations and
| some depression owing to the endeavor OF finance
to preserve Its equilibrium was very natural. But
that there should be the heavy decline which did
take place was illogical. What has TRANSFERRED as
the great European wa has progressed? To-day I'm
London the national securities OF the United
States are the nrmest and most buoyant In
the market. The first rush to convert
everything into money has given place to a desire
to convert money into the most reliable investment.
Our bonds have rallied four to five per cent, although
the war has now reached stage OF severe fighting.
Gold 1885 on the declaration OF war; 1t was
l2O4 during the terrific fighting at wissem-
bourg Were 1t another season of the year
the foreign influences affecting the premium
would be Of little moment But we are
on the OF the period when, with the closing out
OF the cotton crop. our exports the highest of
the year. while fear exists tina: with the prostra-
ton OF the manufacturing interests in England the
new crop will fall OF the usual demand 1t remains
to be seen, however, whether In place of remitting
specie in the ensuing fall shall not be in receipt
of large amounts OF foreign capital, sent here for
refuge In the storm that threatens oil Europe. 1t -
well known that already orders for the realization OF
capital invested with US have been countermanded
How is 1t that the municipality OF Boston has within
few days negotiated loan Of $4,000 900 with the
Barring Brothers, OF London? On Thursday last the
Bank of England raised its rate Of discount to six
per cent. On the same day cons0ls In London de-
clined, and American fve-twentes advanced.
| What Is the reason OF this 1t is an old
axiom OF finance that high rates Of interest
| mean bad security. The advance in the
English discount rate mat there Is dlstrus
OF home paper Consequently the securities OF
America-a country distant from the war and likely
TO derive benefit from the war--enhanced in value.
| The higher the Bank Of England puts the discount
rate the better 1t Will be for American credit and
the less likely bonds to be returned to us.
This theory will explain also why gold, which on
the news or the action Of the Bank OF England
directors at first l22, declined subsequently
| to 120ai.
THE BANK STATEMENT.
| The weekly bank statement Is unfavorable. The
total loss IN reserve is 49, 800 OOO against which the
liabilities have been decreased only about 81 OOO
| The loss In specie was expected but considerable
surprise occasOned by the decrease of 49, 500 900
| in legal tenders. 1t is accounted for, however, by
the fact that in addition to a moderate movement OF
currency the interior there were large transfers
OF deposits to the new German American Bank
which is not yet in the Clearing House Association
The statement contrasts with Its predecessor as fol-
lows
| JutV 30. August @. Chdnges
Loans. $2S $3.50, SAB 1921, 1872 LA Dec 1861 69e
Specie. .... 30,263 800 20, 472, 592 Dec 379l 29s
Circulation. 33, O05,533 49, O43. la Dec. So 1885,
Deposits, 227 555, FOL 900, SI9 300 Dec. 6736 4Ol
Legal tenders 54,S37,95l 52,2S7.1SS Dec 1850 76s
The banks now hold SIS, 3l0, 1859 IN excess of the
| legal reserve.