The sun. [volume] (New York [N.Y.]) 1833-1916, 1898-09-11
rr1rmlE ~ coNNnRuAL


alba period of hesitation following the summer
ADVANCE In prices. has at last experienced
a reaction worthy OF the name. Many
people who are Interested In the stock
market on n speculative basis ascribe
the almost general decline in prices that has
taken place this week to the higher rates
for money and TO the failure OF the
management OF the st. Paul Railway Com
pany TO fulfil popular expectations OF y
sem%i-annual dividend Of 3 y cent. upon the
common stock ofthat company. AS q matter
Of fact, nothing that has occurred this week
has impaired the intrinsic value Of the se-
curitles dealt In on the Stock Exchange.
On the contrary. all Of tho noteworthy
developments affecting values have been
Of q character to enhance them. Even the
aOtion Of the st. Paul directors. while It failed
10 furnish tho speculative community with
the stimulant It desired. must. whom seri-
ously considered. be regarded as favorable
TO the stock. The comparatively small
amount Of cash which speculative holders
Of tho stock hoped the management would use
70 place the stock upon a @ y cent. basis is still
IN the treasury OF the company. and be-
longs to the common stockholders. and
will be used to their advantage either
In STRENGTHENING the financial and physical
condition Of the property or in the future dis
tribution OF profits. The chances are that even
II the st. Paul directors had fulfilled popular
oxpectations as to the dividend upon the com-
mon stock OF their company the market, owing
TO the speculative conditions that existed mp
to q day or two ago. would not have re-
sponded to the occurrence This view ts sup
ported to an extent by the course OF the market
for Atchison adjustment bonds. upon which 4
v cent. interest for the last fiscal year. which
had generally been expected. was declared this
week.
The monetary situation has doubtless
been more potent than any other factor
in checking speculation. 1t has also in
culcated q more discriminating view as
TO the intrinsic value OF securities. When
ever the money market becomes active the
speculative community is made to realize
that the substantial basis OF the market
for securities is made by actual purchasers.
and thai these are governed In their oper-
ations by the return they can secure upon
their Investments. When money on call rules
at 1kC02 q cent. and securities can be bought
at prices that will yield q much higher rate.
capital is almost certain to be attracted to the
Stock Exchange. but when money rules
at 1904 y cent. and time money and
commercial paper at proportionate rates
and interest and dividend paying securities
have risen to prices that reduce the re-
turn upon them to about the rates for
money. to say nothing Of the risk in
euTToQ IN Duyluk Uleuls LuoEo "ubI u
viously come q reimbursement Of values to
q point that will again attract actual buyers.
This is what has been taking place in the
stock market during tho past week. The
larger operators. with their customary
shrewdness. have doubtless taken advantage
OF the situation. while smaller ones. as
they have seen profits melt away have been
eager to secure at least q part OF them. Still
another class. namely. the moro sanguine and
less substantial dealers. have been compelled
to throw over their holdings acquired when
the bullish sentiment was most rampant.
The declining tendency Of the market was
checked to-day. partly by the covering Of
shorts and also by some buying through
commission houses that was evidently in
duced by the extent OF the reaction. The
market is unquestionably healthier for the
liquidation that has occurred. The course OF
speculation In the immediate future will OBJ
viously be governed to q large extent by
the money market. The banks have contracted
their accommodations this week several mil
lion dollars. and the reduction in the
surplus reserve to $1,000. 900. all OF It held by
comparatively few institutions. shows that
they were compelled to do so. The stu
alton, however. cannot DO REGARDED as
critical because Of the immense amount Of
money In the country and the condition Of
the foreign exchange market. which. owing to
the state OF our foreign trade. makes heavy i'm
ports OF specie probable. The movement Is
already under way. and Is certain to increase in
volume as the season advances. Money is easy
In London. breadstuffs and other staples Of
which this country has a large surplus are In
demand abroad and. what is equally important.
there are indications Of a revival Of s~pecula-
ton in London extending to American shares.
OF which the supply there is exceedingly small.
The domestic business situation 10 in
the main satisfactory. Prices of staple
goods average the highest in five years
and bank clearances and railway traf-
fc returns indicate heavy consumption
and free marketing Of merchandise of all
kinds. The iron industry is constantly gaining
ground. and will doubtless be further benefited
by the tendency toward consolidation of the va
Eious interests engaged in producing and man
ufacturing iron. The Government crop report.
issued this afternoon. was not as unfavorable
as to the condition Of the corn crop as had
generally been expected. the decrease in
condition being only about 3 y cent.
whereas a decrease OF about 9 y
cent. had been looked for. Tho two
untoward influences that should not be
overlooked are the constant accumulation
. of money in the Treasury and the inability
Of railway traffic managers. particularly
those Of the trunk lines. to maintain
rates. although the volume Of business
being handled would seem to be large enough
to minimize competition. The feature OF TOD
days stock market was a net advance OF
nearly 9 points in American Tobacco.
which was accompanied by rumors that
progress is being made coward an alliance
between the company and the plug tobacco
manufacturers. This movement had some
effect upon the entire list. and particularly
upon the market for the other Industrial shares.
As compared with the final prices Of Friday,
Sept. 2. the majority of stocks are lower. The
more important net declines are In American
Sugar Refining. z p cent; Union Pacific.
8; United States Rubber preferred. 2;<:
St. Paul, General Electric and Missouri
Pacific. 2H each Peoples Gas. Ten
nessee Coal and Iron and United States
Rubber. 2h each Union Pacific preferred. OK:
Northwest and U. 8. Leather preferred. IN each
Burlington and Quincy. 2K; American Cotton