The Birmingham age-herald., 1902-10-12
STOCK MARKET
 TAKES A SLUMP Poor Bank Statement Gave It a
 Hard Shock
  LOW MARGINAL HOLDINGS  None of the Best Equipped Financial Authorities Could Pretend to Ex- plain the Showing Made
 By the Banks.
LOW MARGINAL HOLDINGS

New York, October 1.-The response of the stock market to the shock of a poor bank statement, served as evidence of the low marginal holdings of stocks that must stl remain in the market The nervousness disclosed by the pros peot of further withdrawals OF credits from the stock market by the banks could hardly be due to other than those holding stocks on margin with borrowed money.
 None of the best equipped financial au- thorities could pretend to explain the chewing made by the banks. The shift ang Of loans, due to the weeks syndicate operations. may be supposed to have off, set tho large liquidation in the stock market and thus account for expanded loan account of the banks. But con- lecture is at loss to account for the disappearance of tho expected gain of over $2, 900 in cash reserves, as result of the receipts of foreign gold during the week The small gain in the net deposits Ialso fails to ''prove'' the changes in the loan and reserve items. The statement showed tho standing of the surplus with the exemption of reserve allowed against kgovernmnet deposits as well as without that exemption. But the present policy of the bank: of not encroaching upon re- serves against government deposits, has been so clearly shown as to leave little comfort for spectators in the hope of a resort to that relief. There was some large selling before the appearance of the bank statement which was attributed Ito the account of a large operator who was seller at different times during the week, bupt 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 market this week with corresponding benefit to the resources of the banks available for other purposes The result has been a growing relaxation of the pressure upon stock market borrowers to sell stocks any repay loans. The ques- tion has come into prominence whether the forced liquidation is finally over for the season, and the spectators short Of the market have chown their fears that this may be true by covering their short contracts.
 This short covering has been an im- portant element in the recovery in prices but observers have professed to see evil dence of buying by important inside in- terests as well. Notwithstanding the i'm portant recuperatfve accomplished by the banks they have persistently refrained from extending their stock market loans and have implied their conviction that it is the part of wisdom to conserve their resources for the large demand from the interior, which is still likely to be made The unchanged form in which last Satur- days bank statement was given out, counting government deposits with others as demanding the maintenance of re- serves against them, In spite of the per- mission by the secretary of the treasury to release the reserves agaInst govern ment deposits, was accepted as notice from the banks that no loans would be extended to 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 re- vive the dull speculation.
 It is evident that the liquidation has been held well In hand and directed with a purpose to avoid all possible damage. The interests involved in the large specu- 1atiye commitments in the stock market in the control of the banks and trust companies in the ownership of the large railroad systems, and In the great pro jeets of combination and their resulting crop of new securities, are so intimately related and so nearly identical that this cautious and considerate policy is easily understood. Bonds have shared to d de- gree in the depression of stocks. United States old As and 5s advanced A; the 3s and the new 4s, i per cent, as compared with last weeks closing call.