The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-10-13
WEEK In WALL STREET
BANK STATEMENT PUZZLE AND
GIVES LITTLE ENCOURAGEMENT.
1t Is Now Believed that the Reserve
Released by Secretary Shaw Will
Not BE Released for Loans.

NEW YORK, Oct 1.-THE response of
the stock market TO the shock of poor
bank statement served as evidence of the
large marginal holdings Of stock that must
still remain in the market The nervous
ness disclosed by the prospect of further
Withdrawals of credits from the stock mar
ket by the banks could hardly be due to
other than those holding stocks on margin
with borrowed money. None of the best
equipped financial authorities could pre-
tend to explain the showing made by the
banks.
The shifting of loans due to the weeks
syndicate operations may be supposed to
have offset the large liquidation in the
stock market, and thus account for the
expanded loan account of the banks. But
conjecture is at loss to account for the
disappearance of the expected gain of over
S2,0O,00O In cash reserves as a result Of the
receipts of foreign gold during the week.
The small gain in the net deposits also
fails to prove with the changes in the
loan and reserve items. The statement
showed the standing of the surplus with
the exemption of reserve allowed against
government deposits, as well as without
that exemption. But the present policy of
/ the banks of not encroaching upon the re-
serves against government deposits has
been so clearly shown as to leave little
comfort for spectators in the hope of
resort to that relief.
There was some large selling before the
appearance of the bank statement, which
was attributed to the account of large
operator who was seller at different times
during the week, but the selling at the last
was quite promiscuous, including the put
ting out of short lines by professional
traders. The assumption was general that
further loan contraction by the banks is to
be expected.
Important liquidation of marginal ac-
counts has been effected in the stock mar
ket this week with corresponding benefit
to the resources of the banks available for
otner purposes. The result has been
growing relaxation of the pressure upon
stock market borrowers to sell stocks and
repay loans. The question has come into
prominence whether the forced liquidations
are nnaily over for the season and the spec
uIators short of the market have shown
thelr Iears tnat this may be true by cover
Ing their sohrt contracts. This short COW
ering has been an important element in
the recovery OF prices. but observers have
professed to see evidence Of buying by i'm
portant inside interests, as well. Not
w1thstanding the important recuperation
accomplished by the banks, they have per-
sistently refrained from extending their
stock loans and have implied their convic-
tlon that 1t is the part of wisdom to con-
serve their resources for the large demand
from the interior, which is still likely to be
made.
The unchanged form In which last Satur-
DAY 8 Dank statement was given out, count
ing government deposits with others as de-
mandlng the maintenance of reserves
against them, in spite of the permission by
! the secretary of the treasury to release the
| reserves against government deposits was
accepted as notice from the banks that no
loans would be stock-market borrowers
| The important liquidation of the early part
OF the week followed. There is good
| ground for the belief that this included
| large holdings by some of the powerful
| pools and individual operators who have
| striven to contest the reaction and revive
| the bull speculation. In addition to the re-
lief of the money market thus afforded, no
| less than s5,0O0,0OO of belated gold arrivals
have been made available to the New York
| market OF this about $3.7oo.o0o was of Aus
| tralian gold, transferred by telegraph
! through the subtreasury from San Fran
| cisco Immediately on its arrival there and
| the remainder was made up by parcels of
| gold from Europe Of the lot of South AZ
| rican gold secured on passage by the Ma
| tional City Bank.
| There have been large payments on ac-
count of New York taxes during the week.
and the deposit of the proceeds i'm the
banks has added to their resources. There
| have been some large syndicate transac-
| lions also, including the payment of a 80
/ per cent. installment of nearly S1SO 600 600 on
account of the Louisville & Nashville
transfer and so per cent call on sub
/ scriptions to the ship-combine syndicat tie
for about $4,000, Co., Preparation for these
was an unsettling influence on the money
| redeposited in the bank. The banks. how;
ever, still refrained from relending i'm the
stock market and the money stringency
| continued.
When buying of stocks was renewed nm
the presumption that the increased banking
| resources were to be made available for
the stock market the call loan rate would
| be run up to 10 per cent, which is consid-
| cred prohibitive for stock speculation n,,r-
| poses. 1t is evident that the liouida-
ton has been held well in hand and direct
| ed with purpose to avoid all POSSIBLE
| damage. The interests involved i'm the
large speculative commitments in the stock
market marx IN the control of the banks and
large railroad systems and in the great
projects OF combinations and the resnltino
crop OF new secur 1, are SO Intimately re-
tious and considerable policy is easily under.
stood. On this ground the relaxation of the
p pressure upon marshal holders might be
preparation for further liquidation and Re-
take advantage of the short sellers driven
Sentiment by f fSy IN Rep prices Speculative
whether the necessary liquidation has haeyy
accomplished or whether it has simply
| paused.
Looking to the future there is No f,rtho,
important relief for the New York moneI
market in sight until the interior Now
ment of currency shall turn again in favo,
a al
reported engaged both In Australia anS
across the Atlantic has now arrived and !.
in the reserves of the New York hapLS
| Discounts have become easier at the For
eign money centers, but the downwarf
| course of sterling exchange which result
has been checked by the demand for re
mittance in payment Of obligations TIL,
| great foreign banks continue to lose eoid
| and ii is estimated that the Bank of Eng
land is about to take measures to make If,
| advanced discount rate effective In the ona,
| market and thus check the onwa ri -, 49,
ment of gold.
The fine weather Of the week has hoo,
| favorable to the movement of grain Viii,
has been delayed, and the downwar nj co,,r.
of exchange at Chicago indicates on 10
| creasing pressure there for CURRENCY b.,
the forward movement of grain gives Drorn
Use also of replenishing the supply az Hill
| in the foreign exchange market With 80
| cessation or active pressure upon borrow
ers to liquidate, there has been increasin,
| attention paid TO the effects of the antbnn'
| cite miners strike and the VARYING nbns q
| of that contest have been reflected in nj
| movements. pay
| Bonds have shared to a degree I'm the L.
| preston of stocks. United States old fo,r
and fives advanced a, the threes II and ~
| new fourS i per cent, rs compared IT.
; last weeks closing call. "''
The following table shows the range =
| stock prices on Saturday:
GGranger Farwell & Co.'s telegram
STOCKS. Open High Low ~.
/ INDUSTRIALS- ing est est as
, Am. Car & Foundry pref. 80 % 81 81
| Am Cast Iron Pipe......... l6 IA Ie' -,
J Am. Cast Iron Pipe pref. san SAN 5sh 55ssii