The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1902-08-17
STOCK MARKET
DULL AND'WEAK
Professionals Transacted the
Little Business Done.
REVIEW FOR THE PAST WEEK
sTRINGENCY OF THE MONEY
MARKET MENACING FACTOR.

statement reinforced the admonition
n Yesterdays per cent money rate
az to the narrowing resources OF. the
local money market. In spite of the
relief Afforded by extensive transfer of
loans TO foreign lenders, through the
medium Of the exchange market, the
large local requirements have resulted
in increasing the average Of bank loans
10 the extent OF 81 653. 900.
The stock market was dull and pro-
fessionaI throughout. There is no loan
market on Saturday and the practical
effect of the bank statement on the
money market must await the opening
on Monday. 1t is clear that higher
money rates are indicated. There was
q continuance of the aggressive bull
movement in the Toledo. St Louis &
Western stocks. but they reacted
sharply with the generally heavy tone
developed after the bank statement.
ST. Louis southwestern preferred was
rushed up TO a over last night just
before the close. Southern Pacific and
the western stocks generally were sub
feet to profit taking. The reported in
tentiou of the Southern Pacific direct
ors to ask authority to issue 800. 000. 900
of bonds 10 improve the property is
given as an explanation of the recent
strength Of the stock. The market
closed heavy.
The cOuntry's brilliant crop prospects
and the danger of a stringency in the
money market this fall have been the
conflicting influences in the stock mar
ket this week. The week opened with
the latter influence decidedly in the
ascendant. The bank statement, pub
lished last Saturday while the stock
exchange was not in session, revealed
so considerable an inroad upon the sur
plus reserve of the banks, already at
an unusually low figure, that a dis
quoted sentiment made itself evident
in free offerings of stocks. The max
imum interest rate, which has not ex-
ceeded 3 per cent for call loans, ran
up to per cent and the majority of
call loans have been placed at that
rate during the week.
Then the publication of the agricui-
tural departments crop report and the
export estimates based on it's figures
turned the tide of sentiment toward the
bull side. There was some later relief
from apprehension over the money sit
uation wrought by the abundant sup
ply Of foreign exchange bills, indicat-
ing new offerings of foreign capital in
the local money market. Rumors of
important new railroad combinations
were renewed and the operations of
powerful speculative pools gave the
market some animation. The appear
ance of the market has been somewhat
spOtty, however, and the exigencies of
the money market have had rather a
subduing effect on enthusiasm
The government crop report seems to
warrant the belief that the grain har-
vest of the country will pass the previ-
Gus maximum The foreign require
ments are not yet so clear, but it is
evident that we will have very
abundant surplus to send abroad. Rail-
road authorities from all parts of the
country report a very large current
traffic. and a prospect of all the bust
ness IN the future they have facilities
10 take care of.
The extraordinary demand for iron
and steel continues in excess of the do
nestle capacity and imports have to
De made to meet requirements. The
anthracite strike. the only seriously
unfayorable feature of the situation, is
factor in restricting the output of
iron. Preparations for increased means
of production will do away with the
necessity of imports of iron before
long.
Jobbing centers report a strong in
quiry for fall business. Bank clear
lngS throughout the country are very
large and all other signs agree in the
promise of unyarying activity in trade
and industry for the coming season
high money rates under such Circum-
Stances are the natural signs OF profit
able use for money in ali sorts of
ways, There is no restriction of credits
or doubts of the soundness of business
conditions TO account for the high in
terest rates which money commands
But in the case of securities, which
may be held at artificial levels by
means of borrowed money. there is the
danger that a withdrawal of credits
from the spectators would leave the
stock market without sufficient sup
port for prices and would lead TO COL
lapse
Experience proves that a steady in
1erest rate at not exceeding 9 per cent
In mercantile affairs is possible, while
money rates on the stock exchange
Tor the purpose of holding securities
on margins are soaring to panic fig
ureS. 1t is clear that demands upon
the money market this fan will be
unusually large At the same time the
Indebtedness to foreigners is known to
be extraordinarily large. Syndicate
borrowings abroad early in the year
may be presumed to have been predi-
favorable trade balance at last years
level Instead of that. the excess of
our merchandise exports over imports
ior the seven months of the calendar
Year is 1888. 325, S33 less than last year.
There has, in consequence been a very
extensive renewal of foreign borrowing
10 later matuTities. But while the
Trade balance in our favor has been
materially cut down. il still amounts
10 the substantial figure of $191, 400. 761
IN the seven months last past. and is
subsequently added to with every pass
ing month
The prospect for the export demand
Tor the coming crops indicates that
the increase in our trade balance will
De largely accelerated. The growing
certainty Of this has led to the large
additional borrowings abroad, which
nave led 10 the sharp decline in the
foreign exchange market during the
latter part of the week. has checked
the outward movement of gold and
aroused the hope that a source of Suf-
hcient supply has been found for meet
ing the coming requirements of the
west for money and credits during the
crop moving season. The beginning of
this interior demand is now almost
cdlly expected
Fears of disturbance of the money
market by the governments fiscal OPP
tfauons is not altogether allayed, al
though the continuing deficit in the
revenues up to this time has relieved
The money market from requirements
on that score. The enumeration of
the influences which have been made
10 subserve speculation would not be
Wit rhsa nc