The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1901-07-15
LOANS HEAVILY CALLED
DRASTIC LIQUIDATION IN STOCKS
HELPS THE BANK RESERVES.
Underlying Causes of the Weeks
Pressure to seIl-Efect of the Corn
Crop Damage-Money Market.

NEW YORK, July 13-There was a
feverish and erratic market for stocks
throughout to-day's short session, due TO
the hesitation engendered in the minds OF
the bears by the violent break In the corn
market and by the large recuperation in
the condition of the clearing house banks
disclosed by the weekly bank statement.
There were two sharp rallies account of
these factors. Neither rally was held with
any firmness, and the market closed with
renewed declines at many points on realiz-
ing and sharp advances in individual
stocks There was evidence of continued
pressure 10 liquidate in the opening deal
ings. most marked in the United States
Steel stocks. The preferred was carried
down 2t points before vigorous support
rallied 1t. The common lost IA and
rallied more easily. The preferred rose
again III with the general rally in the
market but continued under pressure. The
recent market leaders, st. Paul. Atchison
and Union Pacific, lost l 10 points but
came up vigorously when the break in
corn on the Chicago market was reported.
The recovery in corn sent prices of stocks
down again as ii was feared the move
ment was more due TO precautionary real
izing by longs In corn, on the possibility OF
Sunday rains. than to actual news of
moderation of the conditions in the corn
belt. The banks showed a larger gain in
cash than expected.
The Importance of the weeks liquidation
in the stock market is measured by the
enormous loan contraction of $21. 00l. 800
This is the largest decrease in loans for a
single week in the history of the clearing
house. with the single exception of the
week ended May Is of this year. which was
the week following the May panic, when
the loans were reduced s24, 204, 800 Drastic
liquidation of speculative accounts has
swept the stock market this week and con-
siderable long selling has been added under
the threat of damage to values of securi-
ties by developments indicating future i'm
pairment of earning power. The speculative
buying which was conducted pretty stead
lily during June has been thoroughly
shaken out, and the level of prices carried
below where II started. The process was
begun last week and cut short by the adj
journment of the Stock Exchange from
Wednesday 10 Monday of this week The
developments during the interim aggra-
waited the pressure to sell this week.
A survey of the motives of the June
speculation will help the understanding of
the acuteness of the depression this week
For one thing, the stiffness OF the money
market was persistently ignored during
June on the supposition that, with the July
requirements met and the accommodations
redisbursed. there would be abundance OF
resources and easy credits. On the con-
trary, bankers have shown marked in
disposition TO extend credits for speculative
purposes. They have exercised more strln-
gent discrimination TO collateral under
the influence of the disclosures in connec-
ton with the Seventh National Bank fall
ure. and they have called many loans to
repair inroads upon their legal reserve.
Fresh experts of gold TO Germany made
additional drains. The movement of the
interior money markets has indicated an
unusually early demand on New York for
funds to move the crops. and bankers have
felt impelled to prepare themselves for this
The sums disbursed for dividends and in
terest on July /, which were unprecedent-
eddy large, made no impression on the stock
market In the way OF demand lor rem,
vestment, and buyers who had accumulated
stocks with the purpose of meeting this de-
mand were disappointed There is reason
to believe that there was much manipula-
ton of prices during June by powerful cap
italists with the purpose OF repairing the
damage to values wrought by the May
panic, in order to afford a better basis for
credits in the furtherance of additional
financial projects on the support OF those
already entered upon. Wall street Is In
clined to recognize a division into two
groups of the dominant financial power of
the country, the distinction between which
was emphasized by the struggle for the
control of Northern Pacific. The operations
of these two groups are easily distinguished
as independent, but as result OF the prom
ised settlement of the Northern Pacific con-
test they were supposed to be not antaGo-
nistic, but to be as one to support the stock
market at the high range of prices. The
fear got abroad this week that the policy
of the two groups in this respect was di-
verging. Brokers supposed TO act Tor mem
bers of the one group were selling stocks,
while for the other there was buying
Banks affiliated with the capitalists OF the
one group were asking higher rates Tor
money and calling loans, while banks
controlled by the other were S placing ing
money rate. In the absence OF
a formal announcement on the subject
the inspired publications designed 10 Sreabe
ern Pacific failed of their purpose The
announcement by the Atchison. Topeka
Sa,s sane between Chicago and Missouri river
points to go into effect July 10, was
proclamation of the futility of the COM
munity of interest plan to prevent rate
contests in the very territory where that
policy had had its most striking example.
A large part of the speculative buying DUR
ing June, 1t will be remembered, was based
upon an assumption that larger and
more comprehensive project or community
of interest had been the outgrowth of the
Northern Pacific settlement inns week S
market proves that larger speculative hold
ings still remained. which were bought on
belief In that project. and which were UNI
loaded unfortunately in the fright caused
bv the doubts cast upon It.
II will be seen, therefore, that the stock
market was in a weak position technically
otherwise il Is not supposed tnat IL would
have proved so vulnerable TO the effect of
the Immediate developments of an unfavor-
able character of the week. The damage
TO the corn crop, which is admitted TO be
severe, is of most immediate concern TO
the grangers Pacifics and Southwesterns,
and these particular stocks have been in
fiated by the overexploitation of the COM
munity of interest project and the So
called Greater Missouri Pacific rumors
Their losses were severe. and out Of all
proportion to- the damage to the corn crop
as measured by the price movement in the
corn market The weakness in the rest
of the list was mere or less sympathetic
even the wheat grangers losing ground
just as wheat advanced in sympathy with
corn in spite of the excellent promise of
the wheat crop. A contributory cause to
the weakness of stocks was the threatened
strike OF steel workers.
The railroad bonds have been affected
in sympathy with stocks. but In much less
degree.
United States new tours declined u and
the refunding twos. old fours and the ives
advanced Il per cent. over the closing call
of last week.
Closing
Stocks. Sales. Bid