The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-05-04
SMALL TRADE In SHARES
SPECULATIVE FEELING, HOWEVER,
Is NERVOUS AND EXCITED.
Passing of the FURRY I'm the webb
speciaIties-CriticaI OF
the Banks Monetary sourc

NEW DIRK May 3-The net changes in
to-day's stock market show little OF the
feverish and nervous experience of the two
hours trading. When the market closed
yesterday there was little realization Of the
nature Of the financial troubles reflected in
the collapse yesterday Of the sO-called
Webb group OF stocks on the Stock Ex-
change and I'm the curb market. To-day
opportunity had been given TO make provis-
ion 10 avert the threatened failures and
TO provide for support in the stock market
The fact that no stocks are deliverable on
Saturday under contracts. according TO
Stock Exchange rules. and that loans made
on Friday carry over TO Monday. admittedly
helped the efforts 10 avoid trouble There
was a threatening break in prices at the
opening Of the stock market, in spite of a
strong upward movement in Louisville &
Nashville and Pennsylvania. These ad-
vances were lost. however, and supporting
orders at weak points were found necessary
TO check indiscriminate liquidation. When
St. Paul was selling in 1OO-share lots at 10
there were bids in the market for 1900
shares az 17OA. The centralized buying was
not followed ZIP when it was seen that the
selling was checked. After the bank state
ment was published the buying was re-
newed in a more aggressive manner. and the
market developed a fairly buoyant tone with
the closing active and strong. Early losses
were generally wiped out and net gains
were quite common at the close. OF the
stocks supposed 10 be Immediately con-
cerned in the disturbance. Rutland pre-
ferred fuctuated between 1O3 and 90, with
the last sale at JOG, compared with 102 last
night. St. Lawrence & Adirondack was
variOusly quoted at 80 bid, 30 asked, at 20
bid and 40 asked. with the closing quota
ton 50 bid and 100 asked. The increase in
cash shown by the banks was a total sur
prise. as the heavy subtreasury absorption
during the week indicated a loss of up
wards OF 100000. The relief thus afforded
was "A welcome one, in view OF the loan ex-
pansiOn Of upwards Of 100000 The sharp
liquidation in the stock market. it is hoped,
has served to relieve the tension of the
money situation. although an active money
market is expected next week.
Declining speculative interest has been
shown in the stock market this week and
efforts at supporting prices have not met
with entire success. The mOnth-end re-
quirements precipitated a stringent condi-
tiOn in the money market, which was ag-
Rravated by the collapse in international
Power and the distrust engendered in some
CT the other indUstrials supposed to have
affiliations with that company. or whose
conditions are equally shrOuded in mystery.
This undoubtedly led TO some discrimina-
tion by the banks against industrials as
collaterals in loans. The ingenious admis-
sion by one of the principals in the Power
episode that the slump was due TO the
neglect of his patron To put in a buying
order for the stock at the same time as his
selling order was impressive as an eX-
ample OF how some of the recent uneX-
planned dvances in prices might have
been brought about. Match orders and
wash sales are terms whose significance
are we'll understood in Wall street as COW
ering a process OF manipulation by which
the holder of "a large proportion of the
shares of a stock can advance the quota
1ion By a series of transactions with HIM
self by orders through different brokers.
An appearance of great activity and
strength may thus be impaired TO a stock
which IS, in itself, a powerful attraction to
Spectators who deal in the security on a
margin even without a knowledge or faltn
IN the intrinsic merit of the property. The
most striking fact in the Power episode was
the entire lack of a general market for the
stock. in spite of its dazzling rise of over
100 points when attempts were made TO
effect real sales. Entire collapse was the
result. The episode invited attention to the
recent course of many other stocks. Even
among the standard railroad stocks there
are instances where the market turnover
has amounted TO several times the out
standing capital OF the company in the
course of a few days with a resulting price
change of only a few points. Taken in con-
nectiOn with complaints of commission
houses OF the scarcity of orders from the
general public, these facts awaken diStrust
OF the genuineness of some of the price
movements IN the markets. Day after day
new high record prices are established in
many standard railroad stocks. TO say
nothing or the large crop or new and I'M
tried industrial securities of which there
IS little public knowledge beyond the
price movements in the market. II is al
most an inVariable rule that declining
money resources is the Instrument for dis
closing the weak market position of secur-
tiles. Stocks whose high prices are due TO
buying with borrowed resources with a
view to only temporary holding must be
thrown over when loans begin 10 be called
In. The evidence OF the instability of their
value Is Disseminated against and aggra-
Yates the conditions.
The statement that the furry in what
was known as Webb-Meyer securities was
precipitated by the refusal of the Hanover
National Bank to grant a loan TO DIR. Webb
was denied by President Woodward. of mat
bank, to-day, who said that the bank had
never had any financial relations with Or.
Webb. Mr.. Woodward said he did not
know DR.. Webb. Transactions in the Webb
Meyer stocks on the curb were extremely
light. Two hundred shares of Dominion
securities changed hands at 20. a decline of
* points. The closing bid was 40, IS asked.
one hundred shares of Hackensack Mead
ows sold at -. a decline OF $40. The bid
price at the close was %, 20 asked. There
were no sales of North American Lumber
and Pulp Ten was bid, 80 asked.
Storage Power advanced half a point, TO
6. 100 shares being traded in. At the close
Do WIS NlAs % ANhEM. vi liz oAOIh Ia
change $500 shares OF Rutland Railroad
preferred sold at 103 TO 90. closing at par. a
net loss of > points. No sale OF St. Law
renee and Adirondack was reported.
a deeper impression than is specifically
apparent has been caused by the action
this week of the New York clearing house
authorities. The decision 10 require insti-
tutiOns TO be admitted in future to clear
ing-hOuse privileges to maintain a cash re-
serve in their own vaults commensurate
with that required of members themselves
IS interpreted as a note OF warning against
the present rate of credit expansion. This
action is primarily and Ostensibly directed
against the rapid rate of increase OF new
banks and trust companies. Ii is also the
outgrOwth Of much serious discussion that
has taken place regarding the growth OF
the deposit-bankiug business among trust
companies without any such legal restric-
ton upon them 10 maintain cash reserves
as are enforced upon banks The trust
companies retain only an insignificant pro-
portion Of cash in their own vaults at any
time. Their cash is on deposit with the
banks and figures there as cash reserves.
II II at the very time when demand for
credits or diminuriOn OF cash in the banks
has run UP the money rate that the trust
companies are attracted TO put out
loans at the high money rates prevailing.
Relief is nOminally afforded 10 the banks
by this shifting OF the demand for credit