The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1870-08-08
N. V. MONEY MARKET ON SATURDAY..

From The ". /. HeFCtS.
The attractions Of the seaside and summer
resorts proved greater than those of Wall street
for the great bulk OF dealers at the Stock Ex-
change, 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 a
gradual change TO cheerfulness and buoyancy-
the result of the reaction abroad in the prices of
American securities. That this reaction was
sure to come in the progress of the war now ex-
listing in Europe was prophesied emphatically
when the first signs OF difficulty made them
selves manifest. IL is the inconsistency of specu-
lators which is so often the secret OF their
losses. One of the most successful
men OF 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 as to the purchase and sale
of stocks, whereupon he betook himself % his
yacht, and, out of sight and sound of the Stock
Exchange, would cruise the intermediate time
away. On his return he found his ven
lures almost invariably successful. Now,
had he remained at home suffering
his mind to be bewildered and his calculations
to be challenged by the numerous intermediate
fluctuations arising out of the thousand and one
rumors and theories constantly circulating and
discussing in the gossipy precincts Of the Long
Room, he would doubtless have FILTERED
away his money in buying when stocks were
high and selling them when they were low
The moral of the above might have been
applied in more instances than one since the
outbreak of the present war in Europe. Those
who to-day are losers by the sharp decline
which has visited every department OF the Stock
Exchange have their own timidity and incon-
sistency TO blame. When it first became appa-
rent that war in Europe was threatened there
was a popular and general proclamation of the
idea that such a war would rebound TO our
benefit. How many proved their sincerity?
That there should be at the beginning of
such a 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 vas Illogical.
What has transpired as the great European war
has progressed? To-day in London the ma
tional securities OF the United States are the
frmest and most buoyapt in the market. The
first rush to convert everything into money has
given place to q desire TO convert money into
the most reliable investment. Our bonds
have rallied four to five per cent, although
the war has now reached a stage of severe fight
ing. Gold was 1885 ON the declaration Of war.
1t was 1909 during the terrific fighting at Weis-
senburg. Were it another season of the year
the foreign Influences affecting the premium
would be of little moment. But we are en- the
eve of the period when, with the closing out
OF the cotton crop, our exports are the high
est of the year, while a fear exists that
with the prostration of the manufac-
turing interests in England the new crop
will fail of the usual demand. 1t remains TO be
seen, however, whether in place of renting
SiltClc III TIC ensuing ldl VIC Sulll lOb DC Al IT,
ceipt OF large amounts of foreign capital, sent
here for refuge in the storm that threatens all
Europe. 1t is well known that already orders
for the realization OF capital invested with us
have been countermanded. How is it that the
municipality of Boston has within a few days
negotiated a loan of $4,000, 600 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 consols in London
declined, and American fve-twenties advanced.
What is the reason of this IL is an old
axiom of finance that high rates of interest
mean bad security. The advance in the English
discount rate means that there is a distrust 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 it will be for
American credit, and the less likely are our
bonds To be returned to us. This theory will
explain also why gold, which, on the news of
the action of the Bank of Englad directors,
rose at first 10 l22, declined subsequently to
l203I."