New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1899-11-12
financial.
The Financial World.

tangled up with currency conditions from which
there seems only one way OF escape; that H. Nv
liquidation. A beginning has been made the
past week. There has been a general decline
in prices, both Of railroads and industrials In
the railroads, the closing prices yesterday COM
pared with the previous Saturday, showed q
decline averaging between two and three points
In the traction stocks Manhattan had an e.
ceptonal decline OF eight points. mainly due IN
its very poor exhibit Of earnings for the Sen.
TENDER quarter the poorest quarter Of N.
year.. In the general run OF lndustrials there
was no specially noteworthy decline. IL we ex-
cept the gymnastics in Leather common; but
Sugar fell some four or five points on what was
certainly the selling OF long stock, which proba.
bly, was thrown upon the market by holders
getting hurt in other things
With all this, the bank statement yesterday
showed the loan item TO be reduced by some
thing over $700OOOO only. Now the outlook is
that this item will continue to shrink. by
liquidation, until II is twenty or thirty millions
less than it is now. II the liquidation is ex-
tended over safe period. say six weeks or two
months 1t will be WE'LL IL 1t is forced rapidly. Il
means some bad shake ups in Wall Street
1t is charged that the banks are combining to
keep up interest rates; that they have some
rates high early in the morning and hold them
up until nearly all demands OF the day
satisfied. II there is an agreement among the
banks to this end express tacit, it is we'll.
The strict maintenance OF call rates from 10 to
IA per cent at this time is a safety check. II
will gradually force the stock market down to
condition Of safety. II is rather disagreeable OF
course; but that cannot be helped.
Wall Street at this time is in the condition OF
a firm which has used up its working capital.
The firm Is doing a good business and has big
stocks on hand; but it has used up its Gus
tomary bank balance in its trading and is in a
tight place in consequence. There are few firms
and members OF firms. who are so lucky as not
to know how very disagreeable this sort OF
thing Is when II happens TO individuals. The
community OF Wall Street, this financial cestre
so TO speak, Is exactly in that position at this
time.
Yesterdays bank statement showed that the
banks nearly three millions under the
line Of surplus reserve. At this time last year.
they were fifteen millions above il. Detailed
reports OF the weeks movement Of currency
make plain that money is still moving West
This time a year ago. money was coming East,
and had been for three or four weeks. We
were also importing gold. We are not now.
How much working capital is left here under
these conditions?
Much has been talked about the Treasury
coming to the rescue by the purchase Of bonds
anywhere from twenty TO fifty millions. Latest
advices from Washington that this is not
likely. The public has right to ask this only
OF the Administration, whether such Admins
tration be Democratic or Republican. or any
thing else you please viz that the cumbrous
and awkward machinery Of the Treasury De-
partment, by which money going into the
Treasury is at once taken out of circulation
that this machinery shall not be made to work
so as to aggravate a bad situation. This may
be asked on general principles. but nothing
beyond IT, At this time. the application Of the
principle would be that the Treasury should
lock up no more currency in its vaults. but let
every dollar, possible remain in circulation
through the machinery of the banks.
II the Treasury Is to give more relief by bond
purchases, IL would seem that the better time
to do this would be toward the close OF the
year, when the financial institutions have 70
draw in money in preparation for the January
disbursements. After the middle OF December
Wall Street is likely TO know what real money
scarcity is. That is. 1t will know it unless oy
liquidation, or some other means, the bank re-
The return OF money from the West can
scarcely be one of these means. 1t must De
very slow The general rise in the prices OF
commodities this year calls for more money to
handle them; therefore causes wider perma-
nent distribution Of money: and the financial
centres, and New York being the chief suffers
most are correspondingly depleted Of loanaole
funds.
If there had been more loanable funds avala'
ble the elections would have been good enough
to make fair advance in the market. With
money scarcity, however. and cooling OF en-
thusiasm by the result in Nebraska nothing
came OF them on the bull side.
Where. it may be asked, is the liquidation to
come 1t must come in securities which are
selling far above the level which the DIVIDENDS
they pay or their prospect Of paying, can
justify. If stock A. is paying per cent ana
Is quoted at figure which would pay TO the
purchaser only 3 per cent, is the man who wants
to sell likely to find many buyers at that ngure
when time money cannot be had at less than
per cent and that only on prime collateral whie
call money ranges steadily from 10 10 10 per
cent? II stocks B.. c. and D.. paying no dVi'
dends and not in very near sight OF any, range
in price from the sos into the sos. is IL not
likely that the money pressure will Slowly
force these down? People who can pay for anu
take away their purchases, need not trouos
about interest rates: but the man who is DOT
rowing on his stocks and bonds. is in a dlfrsreh'
position. Such interest rates eat him up
The market looks now II II would nave
to decline considerably. with rallies whenever
the short interest gets too large. or course
the Treasury comes In with big bond pu''
chase the liquidation will be at least tempo
rarily stayed. There may be special reasons
for trouble in the coal stocks.
CUTHBERT MILLS.