The Indianapolis journal., 1902-05-19
PRICES STILL RECEDING
SPECULATION DILL AND MOST OF
THE INFLUENCES BEARIsH.
Coal Strike n Leading Factor in the
DecIine-GoOd Bank Statement
Has but Little Effect.

short session because of apprehension of
the efforts TO make the anthracite strike a
national coal strike, but practically recov-
ered after the bank statement appeared. A
fall of nearly two points in Colorado Fuel
and heavy selling of United States Steel to
below 40 unsettled the close and made it ir-
regular at declines from the rally. The
drop in United States Steel may have been
due to fears Of special damage TO that in
dustry from a possible interruption of BIZ
luminous coal mining, or it may have been
connected with the meeting of stockholders
on Monday to ratify the conversion of pre-
fered stock and the issue Of bonds. The
bank statement showed a decrease in cash
of over million. where a gain of that
much had been expected. but this was ig-
nored in the satisfaction felt over the
heavy reduction in deposit liabilities effect
ed by loan contraction, by which the sur
plus reserves were recuperated to the ex
tent OF nearly five millions. The weeks re
ductiOn of $22,0S9 100 in the loan account has
only once been equaled. In the week ended
on May IS, 1901, the banks reduced their
loans S24, ,2O4,S0O. This was the week follow
ing the panic week in the stock market,
when loans had been made practically
without limit TO check the panic, and when
the buying to support the market was fol-
lowed by quick liquidation after confidence
was restored. The past weeks events
make ii clear that no such liquidation has
occurred as this loan contraction would
measure. The local trust companies have
been large lenders all the week Banking
authorities estimate loans placed by the
trust companies at as high as $40, OoO. 900.
There has been lending also for account of
interior money centers. This is without
taking any account of the large borrowing
abroad, reflected in the foreign exchange
market. 1t is reported that there have
been large sales this week by American
holders of British consol subscriptions
which have risen in London to premium
of 1916. The proceeds of these sales
would represent, of course, actual replen-
lshment or local money resources, but the
banks hgures must represent for the most
part a shifting of accommodations rather
than loan reduction.
The stock market has settled back into
a seasonable condition of dullness during
the week at a generally lower level of
prices. A process of readjustment has
been in progress both in the stock market
ana the money market. This has been ac-
complished rather by a shifting of accounts
than an active liquidation, although there
were some sharp declines forced on the
market incident to the discrimination by
the money lenders against some of the
collateral that has found its way into loans
during the late season of liberal credits.
Thls w6eding-Out process was the conse-
quence of the previous DEVELOPMENTS in the
Webb-Mayer stocks and the construction OF
the money supply that had been disclosed
Dy the bank statement of last Saturday.
Energetic measures for the remuneration of
the money market were taken, which were
facilitated by the high rate for money
ruling here Supplies of loanable funds were
thus attracted to New York from all do
mestic centers. and foreign sources were
drawn upon even more heavily. The rate
for sterling exchange relapsed violently TO
the lowest point of the year under the
heavy offerings of bankers bills in the
process of drawing on foreign credits. The
supply of commercial bills in the market
was very small, and the bills sold were
in effect short sales and represented in a
degree speculation against the future
supply of exchange, depending on the corn
crop and the resumption of corn exports.
In any event, the weeks replenishment
of loanable resources represents obliga-
tions TO be met in the future. 1t was the
realization of this fact that checked re-
newal of speculation buying of stocks after
the measures of relief of the money market
became effective and the interest rate de-
clined There were also some large loans
placed here directly by branches of for
eign bankers. Another phase of the pro-
cess was the transfer of holdings of Ameri-
can securities for domestic account to Lon
don. Americans cabled orders to London
TO buy stocks there to be held with money
borrowed in London.
The weeks readjustment has restored
the balance in both the stock and money
markets, but the demands on the money
supply are felt 10 preclude the chance of
a favorable speculation for a rise. The
anthracite labor trouble is an additional
effect of the declaration of the strike on
the coal stocks was not acute especially
considering the assurance which has con-
stantly been expressed in Wall street that
there would be no strike. The anthracite
operators profess to feel that they have
much to gain from contesting the demands
Of the miners in the way of recovery of
previous concessions to their demands
This attitude, however does not blind the
public perception to the possibilities of an
extension Of the trouble into the bituminous
other industries, especially iron and steel.
in which continued scarcity OF material
in all stages is reported in spite of the rec
ord output in the trade.
The crop situation has been very atten-
lively studied during the week. The out
come of the years cereal crops is regarded
as of prime Importance in the coming
years prosperity. The monthly govern
ment report Monday was expected to
show important decline in the condi-
tion of wheat, but the amount of acreage
abandoned was "A disagreeable surprise. II
was argued, however, that the favorable
weather since the date of the report must
have improved the condition of winter
wheat while the damage TO the abandon ed
acreage had come early enough to permit
of reDlanting with the all important corn
crop. With that crop barely in the ground
ana the SDTl0S wheat crop Stlll TO be lndl-
Gated the final outcome is felt TO be too
obscure yet 10 warrant speculative ven
lures. The progressive dullness of the
market has been due in small part to
this cause.
The distribution on Monday of $4,000. .OOC
dividend TO the subscribers of the United
States Steel Corporation underwriters SYM
dicate attracted attention TO the enormous
profits of underwriting. The total subscrip-
tionS were for 500 100000. OF this l2Ib per
cent, or $25, 600 600 was paid in. The paid
in capital has been returned to the sub
scribers and the two dividends of 5 per cent
each, or 800 000,0 ,0O0 have been paid, amount
ing to so per cent. of the cash capital en-
ployed. III is expected that two additional
5 per cent dividends will be paid which
would bring the total profits on the under
writing 10 $40OO0,0O0 or 160 per cent of the
cash capital employed. The result is point
ed TO as indicating the powerful attraction
for the underwriting of Industrial combina-
tions aside from the industrial advantages
which may accrue.
The market for bonds has grown dull and
has moved in sympathy with stocks. United
States threes declined Il and all other issues
"A per cent. below the closing call of last
week.
Following are Saturdays share sales and
the recorded price changes:
High Low Closing
Stocks. Sales. est. est Bid
Atchison ................ 1900 7ek 7% TIA
Atchison pref. .-...--.. 200 81 96s4 9s7.
Baltimore & Ohio....... $500 1855 104Lt lO4s,
CANADIAN g a. PPst.... PPscc.. $500 1:7 ,ssS ,su s.
Canada Southern ...... go. .... - 95
Chesapeake & Ohio.... 2200 46is Is 45A
Chicago x Alton........ 400 37L 3gIL 96a