New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1900-06-17
financial.
The Financial World.

1t. 1t is not so much that prices declining
which makes the Street feel down In the mO1th
as the fact that there is next to nothing doing
behind which there is the apprehension that a
bad break is impending. Until yesterday. when
a fusillade of bad news caused activity at thu
expense Of prices. each day has seen business
shrink. and ticker ticking at intervals with
long silences between Such a state Of things
was certainly expected on the eve OF the politi-
cal conventions. but the expectation does not
make the reality the easier 70 bear. The Street
is blue and nervous. Yesterdays market waa
proof Of 1t, And the feeling is natural There
is so much ahead which at the moment looks
the reverse Of cheering that the average man
may be excused for feeling as shaI<y as he Ger
tainly does at this time Now and again YOU
come across some bold individual who is trf-
umphantly sure that the market has discounted
by its decline all the unfavorable features OF
the situation. and is going up with rush right
away; against whom. you IAN match the pro-
nounced bear, who is certain We are in for bad
times-foreign complications falling trade short
crops. and election of Bryan But the average
man has no strong convictions. He is afraid
that the market will be lower; but hopes. rather
feebIy. that II VIII not go far-say. a couple OF
points So
The action Of the Northern Pacific directors In
refusing to raise their dividend rate was mainly
assumed to be confirmation Of the bad crop. out
look in the Northwest The company's state
ment for the fiscal year is good enough-sufH-
GENTLY good to justify the increase of the dfvf-
dend from 10 + per cent; but speculation "a
based less on what has been than on what
is to be. and the stock tumbIed on foreign and
domestic selling after the dividend was an
nounced. That the dividend would not be IN
creased intimated in this column last week
and the week before. Mr. HILL on his recent ar
rival from abroad. talked in a way which GER
tainly did not encourage the expectation OF a
raise in the rate. and the stock weakened in the
market at once London poured out a food OF
it yesterday. and a loss of four points was re-
corded. Around 30 the stock ought TO steady
Assuming the worst for the crop in the North
ern Pacific territory. the earnings should be
sufficient in the next fiscal year TO pay per
cent Next year may see the rate raised II is
certain that section of The country is grow
ing rapidly as the Pacific Coast The ques-
ton now is-what is the extent Of the crop dam
age; and obviously IL is one which no one can
answer, for the reason that it may be considera-
bly, lessened or seriously increased by the
weather Of the next two or three weeks. There
fore the directors acted wisely in taking the
conservative course they did.
The same crop outlook which caused these
Northern Pacific directors TO refuse an Increase
in their dividend. moved the Atchison directors
10 increase theirs. A thousand miles more
separate the territories of the two systems, and
While the one is threatened with shortage. the
other actually has enormous. and possibly
unprecedented. yield Below the northern line
Of Nebraska. the season mas been everyway IA
vorable for the farmer and planter They may
be said to have the call this year. Sc immense
is the wheat yield il is calculated by the officers
Of the company that the AtchisOn Will haul
out OF Kansas this season between 81 and SO
million bushels of wheat against about 10 mill
lens last year: and out of Oklahoma. near u
million bushels against > It is not difficult to
what this means in increased earn
ings. Nevertheless. such facts do not weigh
more than dust in the balance in the present
temper of the Street, which is wholly bearIsh;
but they will tell later. when the turn comes
One thing which puzzles the Street. and Is
beginning to be much discussed. is the constant
expansion of the bank loans in the face OF a
stagnant or declining stock market and what
looks like general check TO trade. The loan
item in the weekly bank statement has reached
a record figure at $40 millions. 1t has been
growing week by week while the stock market
has been declining. both in the general level Of
prices and the volume Of business. The ques-
ton is-who is borrowing the money? A COM
plete answer could of course. be had by an
analysis of the loan account; that is. if all the
banks in the clearing house, and the trust com
panes. drew up statement showing separately
what each was lending on commercial paper, on
stock collateral on bills of exchange, and other
security or pledges. Obviously. however. these
financial institutions are not going 10 do this:
and there is not much left 70 do but TO guess
and the best bankers in the Street confess that
they guess in the dark. 1t is considered sure
that lending a good deal of money
abroad at this time; but the best exchange
houses say that the amount could not cut much
figure in total of $40 millions. Two answers
have been suggested, One. that the check to
speculative activity in the stock market and in
general trade. has been so sudden and recent.
that il has not yet had time to check the hnan-
Cial arrangements which are always going on
ahead Of the actual transactions for which the
financing is done in other words that the
spring momentum Of trade expansion has not
Yet financially exhausted itself The other an
swer Is simply, that the loan increase shows
that Notwithstanding the check in certain lines
of speculative activity. the trade of the country
is. on balance, still expanding.
One may take his choice between these theo-
ries; which. however. are reconcilabIe each with
the other. What many people are asking tax
ing the volume of loans as they are is-hOw are
we to have a bull movement start in the mar
ket with the loans already expanded 20 the
highest figure ever recorded? BY yesterdays
statement, it appears that we stand with $40
millions loans now against IT3 millions last
year-an increase Of 81 millions: while the de-
posts are 800 millions against 9OT-a decrease
of II millions. Thus with considerably the
largest credits ever recorded. we have actually
less deposits than last wear Il II Dossibfs that