The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1873-07-28
FINANCIAL and COMMERCIAL.
EVENTS OF THE WEEK.
The Firm and Conservative Tone
Of the Stock Market.
Artificial Prices and the
Cause.
BETTER TIMES PREDICTED.
Capital Creeping Into New GroOVes-The
Value Of Railroad Securities
TIE LESSONS OF THE HOUR
Are the Banks Specializing in Gold?-
Have They Legal Right to Do So9
WHAT MAY OCCUR.
The Money and Gold Markets
During the Week.
REVIEW OF PRICES.
Capital Creeping Into New GroOVes-The
Value Of Railroad Securities.
THE LESSONS OF THE HOUR
Are the Banks Specializing in Gold?-
Have They q Legal Right to Do So2
WHAT MAY OCCUR
The Money and Gold Markets
During the Week.
REVIEW OF PRICES.
WALL STREET,

WALL STREET, /
SUNDAY, July ~, 1873.
prominent feature OF Wall street during the
past week was the generally firm tone manifested
In the stock market and the steady maintenance
OF prices at figures much beyond the calculation Of
those who predicted only short and sharp sum-
mer campaign. Nevertheless, it may be said Of the
market that 1t has been emtnently conservative
perhaps more so than for years past-wtth fewer
exhibitions Of those sudden "twists," "squeezes"
and small "corners' which have heretofore so fire.
quently disturbed Q healthy equilibrium. It may
also be added that there has been an exhibition of
no little artiflciaty in prces-a fact preemnently
due to the absence Of
SUFFICIENT OUTSIDE CAPITAL
to sustain the market on its own merits, thus
forcing brokers themselves TO become the prin-
cipals In many transactions in which they have
been in the habit Of acting simply as agents. The
volume Of orders has undoubtedly been large,
especially during the past fortnight, but It by no
means favOrably compares with that Of preceding
seasons. Evidence OF this statement was furnished
during the brief urry' in Erie when. the attention
Of the Board being distracted. dealings in other
stocks were almost entirely suspended. There is q
strong intutive ana, of course, ineXpcable feeling
that the coming week will witness change in
this condition Of affairs, and it seems to be based
upon the hopeful prospect or even
HIGHER PRICES IN CERTAIN STOCKS
than have yet been attained, and the opening Of a
wider field OF speculation than has yet been ex-
pored. The strong close OF the market yesterday,
the sudden advance In Harlem, the weakness OF
Erie, the chance of q movement in Canton, the
frmness OF Western Union, Lake Shore and New
York Central. the healthy undertone in North
western and wabash, the reaction in Panama and
generally along the line, and the known presence
in the street Of some of the largest and most sue
cessful operatOrs-these are signs that are re-
garded as almost certain
PRECURSORS OF AN ACTIVE SPECULATION
full Of promise OF the most important results.
Outside OF stocks, however, capital is gradually
creeping into new grooves. We have said that
there Is spirit Of conservatism at work.
Nowhere is 1t more significantly manifest than in
the current OF investment steadily flowing in the
direction of stable railroad securities. Heretofore
government bonds have been the attraction and
mortgages ON real estate have absorbed millions.
Now capital is becoming less fastidious 1t is no
longer frightened by the temporary passing OF
dividend. In fact, it has learned the lesson that
there is as much delay In the nom payment Of
interest on landed mortgages on railroad bonds.
stroke Of lightning may occur on a Wall street
corner and shock crowd but there are millions
of other strokes which fail harmless and unseen.
So 1t is with railroad interest. Here and there
may have been
DEFAULTS OF PAYMENT.
but as compared with the number and amount OF
railroad bonds issued in this country during the
last twenty years the default amounts to mere
bagatee. Hence whenever railroad has been
built where it ought to be built whenever, being
built, it has udiciousy expended its earnings for
permanent re-equipment or the construction Of
49, fho of aiobt 10 ho
ginning to accept the promise Of a grander future
for his wealth and to plant his investments where
they win continue during his lifetime and after
wards return certain and uninterrupted profit to
his posterity. In certain quarters there has been
considerable discussion of late concerning
THE RIGHT OF BANKS
to count gold as part OF their bona tide deposits
which has only been deposited as security and to
earn interest upon the same through loans. These
institutions have likewise been the subject OF stric
ture for departing in this respect from purely
Legitimate banking business" although the fact
is not disproved that at law they have right to
lend on gold thus hypothecated. This point has
been raised because Of the seeming strength which
the banks have given to
THE GOLD CLIQUE
in advancing currency, less the margins, on the
specie bought and deposited by the respective
OpeT6bOrS.
y disturbing some OF the financial thinkers includ-
ing few of the washington officials interested In
Keeping from the public the bare condition Of our
gold market the startling, salient fact which under.
lies 1t ALL should command attention and has been
unwillingly brought to light by the discussion is
that the banks of New YORK to-day are In sucn
condition that II the little handful OF men who now
practically control
THE BULK OF SPECIE
in the metropolis were to enforce their demand
upon the banks and abstract their deposits from
the same-as it IS said has lately been done
by a leading operator, who has shipped gold
to England for the purchase OF Erie-these
institutions would In thirty days present
picture OF comparative heplessness that would
startle the country, force the calling In OF
loans, create stringency In the money market and
knock the bottom out OF stocks. Just now how
ever. it is not probable that such an emergency
will occur. There will be
NO IMMEDIATE DRAIN
upon the banks and as regards their right to earn
money in Legitimate" manner for the beneft OF
their stockholders all that they have to do il to
receive gold on deposit, allow the currency account
to be overdrawn and charge interest on the over
drafts. II this plan does not drive coach and
four through" any law that Congress may make on
the subject then the shrewdness OF Wall street Is
"a delusion and snare"
THE GOLD SPECULATION
was devoid of any special interest In the early
part of the week the price was steady at 116
1852, but later it.declined and showed the other
extreme at 1861. The dealings were quite active
at times and it is said that outside Of speculative
purposes considerable purchases we're made for
permanent holding both by banks and merchants.