New-York tribune., 1901-02-19
BONDS
THE DAYS OPERATIONS IN STOCKS


Stock market values were weak IN the greater
part Of the day. with net losses in most Issues at
the close. In the early trading marked strength
was shown in a few shares, Rock Island Bur
lington. Delaware and Hudson and the preferred
steel stocks being noteworthy examples. The
last named securities advanced on the expecta-
ton that under the new combination OF steel and
iron companies the holders Of the preference
issues Of existing companies would he in bet
ter position than they are at present. According
10 reports put out yesterday, the new steel COM
bination viii have a capitalization of over ST.
600 on which Il is estimated that earn
ings win show from 10 10 Is per cent on the
common stock the returns Of the various COM
panies in 1900 being used a basis. The last
year brought prosperity 10 the iron and steel
trade hut all years will not witness the same
industrial activity and hence il follows that the
receipts Of 1900 not a safe guide for invest
ment purchases Of the common shares OF the big
combinations. The preferred stocks and bonds
ought 10 appeal TO investors who like industrial
securities, as there is little doubt that earnings
viii always be large enough 10 meet the interest
on these issues The preferred steel shares and
most OF the other early market strong features
maintained firm tendency until the close. al
though ending under their best prices while
a
lower level without important recoveries In
the midday trading liquidation by commission
house customers was followed by active raids
against prices in all parts of the list. Many
stop orders were reached, but declines were
not extensive.
Conservative interests in Wall Street are not
inclined 20 worry over the heavy expansion in
liabilities Of the local banks and the falling off
IN reserve holdings Indeed, a further gain in
loans and deposits is expected this week. Loans
are not growing on account OF stock market
speculation, and the actual position OF the banks
Is not being weakened by the operations that
are responsible FOR the great increase IN the
loan and deposit items OF the associated banks
Since January loans have increased Sis, ,l65,-
SEQ. hut the greater part OF this amount is based
upon securities that have been taken out Of the
market and which viii probably never be avail
able for speculative purposes again. Most Of
the current loans are connected with the rail-
road and industrial deals now being perfected
and the collateral against the loans represents
securities bought for the purpose Of control.
These issues VIII gradually be replaced in the
market by new securities, as, for instance the
S4o.000oo0 Union Pacific collateral trust bonds
issued for the purchase Of the controlling South
ern Pacific stock Investors win buy the new
securities. and loans made 10 finance the deal
VIII be paid on year ago the reserve OF the
local banks fell from S2s.000O0O on February
"a 10 about SSo00eO0 on March z Reserve
above legal requirements may for time be
wiped out this year. but such situation will
not reflect an unfavorable position OF affairs at
this centre. The banks hold q large amount OF
money, and their credit facilities may be ex
tended much further without cause for uneasi-
ness on the part OF dspositors. When the pros
porous growth OF big country reduces bank
reserves there is 10 reason for pessimism.
Any important decline in stocks due 10 the
possibility OF calling Of stock market loans will
undoubtedly be taken advantage OF by careful
buyers 10 increase their lines Of securities. In
yesterdays market there were many disap-
pointed traders who had hoped for a sharp
break IN prices. And there number of
rich sold out bulls who decided TO renew their
interest in the market without waiting for
decided setback. The market irregular at
the close, and predictions OF lower prices We're
freely made. Last hour trading, however
fected an exhaustion of the selling power and
resistance against the pressure OF the bear ele-
ment. Prices responded easily to the demand
from the shorts, and sharp rallies were made in
many stocks. The money market showed no
new features, save in the foreign exchange de-
partment. in which decline in sterling rates
took place. This country has large credits
abroad. and local bankers will not hesitate 10
sities require such action.