The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1901-07-29

ine corn-caTying railroads were bene-
fited by the weakness Of the corn market
ar reports of the breaking OF the West
ern drought. a number of minor stocks
moved apparently from Individual causes
Inc American Locomotive stocks and
international Power were sharply de-
pressed. The Canadian Pacific subsidiary
roads responded to the recent strength
In that stock. The Tobacco stocks, Feo-
pie Gas, Amalgamated Copper, Amer
lean Cotton Oil, The Virginia-Carolna
Chemical stocks and a few others were
| notably strong. Traders sold the market
on the Increase in loans reported by
the bank statement, but they induced no
following and covered their shorts before
the close, which was steady at the recOv-
cry.
REVIEW OF THE WEEK
The week just passed has given pretty
clear evidence OF the elimination, Tor
tie time at least, of the speculation for
the decline in stocks and for the rise
III grams which has been going on in the
various mark is during he Whole Of July
The effect on the stock market has been
fluctuations and irregular movements Of
prices with narrowing fluctuations and
decreasing volume of buSin IS. According
to the inVaria be rule in speculative move
ments of any dimensions, this one has
overdone itself The consequence has
been reaction from the recently prevail
ing tendency. Stocks have recovered and
grains have relapsed. Monday morning
prices were the lowest Of the week, but
dIC not ICaCIi except III a rev cases. the
level Of the preceding Monday. The week
opened much as that preceding had done.
Continued hot weather and drought over
the Sunday brought an accumulation of
selling orders into the market which sent
prices down with a rush, and there did
! not seem so be the vigorous support
which was afforded the previous week
when the declaration of the steel strike
had demoraliZed the United States Steel
stocks. Everything looked promising FOR
the bears. But 1t began TO be obvious
before long that the industry of that fac
tloE had involved them so far that they
he STATED to commit themselves further.
and that they We're disposed 10 L1Jse up
their contracts.
The same conditions were manifest in
the grain markets, where the unloading
or the longs produced collapse in corn
out OF all proportion to the meager re-
lief reported for the crops in the drought
stricken districts. AS Il consequence of
the reactlonary tendency of the markets
the week has been given to a sort of
taking stock Of present prices as they
apply to actual future promise More
conservative views have prevailed as to
the relatively lower prices warranted by
the damage to the corn and wheat crops
| 1t is pointed out that the heavy decline
! III the spring wheat yield Of last year
was found not to warrant the severe de-
clines in the prices of Northwestern rail
road stocks. Earnings Of those rail-
roads were found to be well sustained
by the very large general merchandise
was not diminished. Export estimates
of the yield Of corn on the basis Of the
damage done, reveal that a large traffic
yet remains for the railroads from the
crop. The important compensation of
successful wheat crop is urged. The rel
atively smaller portion borne by the
grain traffic on the Western railroads to
TIE total tonnage is taken into consider
alton The large SURPRISES carried by
the railroad companies as a residue from
the several prosperous years are cited to
snow their ability TO face a year of
scantier earnings. But when all is said
the fact is still recognized that the un-
precedently prosperous conditions Of
the last few years are already altered,
with the final outcome Of the steel strike
to be reckoned with Even with the Sc
we're losses already recorded from the
high level of the year. in the prices of
railroad stocks the fact is kept in mind
that the high level was beyond all war
rant in actual conditions, and represent
! ed a large degree Of speculative initiation
/ Questioning arose which found no place
IN the excited period OF bull speculation,
as to just how stocks are to benefit in
value. even supposing all that has been
related of community Of interests and
! passing of control TO centralized railroad
I systems be true. The process in almost
every instance was approximately the
same, and involved the purchase Of con-
| troll at high prices and the Issuance Of
! bonds ahead of the stock Of the pur-
| chasing railroad. These bond issues are
| of a volume that require high earnings
| of the most prosperous years by the pur-
/ chased roads to pay the charges upon
| them and to keep the system out of
! bankruptcy. In one case, for instance,
| the public and the investor are left in
| the dark as to the details of what col
! lateral secures an issue Of Sle0, 000, 900 of
| bonds, involving yearly charges Of 81
| 000G00 ahead Of the stock of the rail-
road. Another reason is the enormous
amount of capital and credits tied up in
the purchase by syndicates of various
control The release Of these credits nat
urally depends upon the marketing Of
the securities, whether bonds or stocks,
issued to the public TO recoup the syn
dicates for their outlay in the purchas-
ing process 1t goes without saying that
the recent conditions in the securities
market have not been Dropituous to this
marketing, and no small part Of the re-
cent heavy liquidation is principally due
to the measures Of protection for capital
lists with large commitments thus neces-
STATED. The beginning this week In
small way of the transfer of the cur
rency to the interior to move the crops
calls attention to the fact that recent
/ liuuidat ton in the stock market had as
its object preparation to meet this
quirC-1ent, and not to supply means for
a record speculation in stocks. The
question also arises whether this year
viii see the normal response 70 this inte-
rior movement of currency in an inflow
of gold from abroad 1t will be remem-
bered that since the South African war
cut off the supply of gold from Europe,
the United States has seen no import
ant inflow of gold when our food stuffs
begin TO go abroad. This was true in
sDite of a merchandise export balance
| in our favor unprecedented in our his
| tory. Foreign money markets look for
a demand for gold from New York in the
! autumn hut as 10 their ability to meet
/ it. authorities are not agreed. The spec
! ulative outlook for the present level Of
prices is thus seen to be much mixed.
/ business in railroad bonds has been on
| a small scale, except in a few issues
| that are related in value to stock by con-
! vertible rights. United States refUnding
| Is have advanced II per cent on call for
/ the week.
| The Financier says: The statement OF
| the New York associated banks last
| week was again favorable showing an
! increase OF 81, 999.2e0 in surplus reserve,
! carving this item to 1913 12s, SIS, or the
| when the surplus was S24 $685. 25. The
! banks may therefore be regarded as In
! an exceedingly strong position for this
| season of the year, and they are pre-
| sumably able TO meet prospective de-
! mands for money from their correspond
/ ents in the agricultural sections of the
| country for cTop-movinG purposes with
/ out being under the necessity Of restrict
! ing accommodations to local borrowers.
The gain of S17.s1 $50 In surplus since the
first week in July has been chiefly ac-
| complished through the heroic contrac-
] ton IN loans. there having been a de-
! duction of S3324S. 400 In the two weeks
ending July l3 and July go. 1t is note
! worthy that the expansion of loans
| shown by last weeks statement was
largely Incidental to the increase in the