The Montgomery advertiser., 1902-11-16
WALL STREET REVIEW
NERVOUSNESS AND MIsaIvIN0s
MANIFESTED.
fluctuations Erratic Throughout the
Session, But at the Close, the
Tone Was Firm-Bank State
ment Deciding Factor.

were errauc fluctuations up ana dow.
throughout The session. fha marke
closed firm, however, and at net advance.
of 1@2 points over last night for tn,
principal stockA.. The bank etatemen,
seemed the deciding factor in driving thu
bears to cover. The loss in cash on the
week was rather less than expected, but
the loan contraction was smaller thar
was hoped for in view of the heavy liQui.
dation in the stock market during ths
week. The market reacted sharply i'm
mediately after the publication of the
statement, but 1t was argued that tht
heaviest liquidation which occurred In
yesterdays stock market would only FIG.
ure for one day in the weeks averages
of the bank so that the statement prob
ably understated the strength Of the
banks. The turn Of the flow of the cur.
rency from the interior to New York
aroused hopes of relief of the money sit
uation from that source. The extent OF
the recent decline and the length of time
1t has continued made an upward Aeac-
ton seem logical to professional trad
ers, skilled in the reading of symptoms
OF speculative markets. 1t is not unus-
ual for downward movement to culmi-
nate with such slump as that Of yes
terday. Bankers were quite unanimous
in denying any occasion for alarming ru-
mors of financial unsoundness in that
portion of the financial world and their
assurances had a relieving effect on
sentiment. 1t is pointed out that prices
had fallen all the way from Is to 80
points principal active stocks from the
high level of the year. 1t also is fact
that at the low level Of Friday although
many stocks reached the lowest prices of
the year there were many Of the specu-
lative faYorites and those among the
stocks which have suffered most severe
ly from liquidation that were still from
Is to 20 points above the low level of the
early part of the year. The liquida ton
of this week was not, like that of the
earlier period of the current reaction, i'm
m ediateiy forced by squeeze of money
facilities, although it is plain that the
ers have allowed it to be understood that
they disapprove of all attempts to initiate
security prices able to invite speculation.
The wholesale sellers of stocks, however,
seem to have acted m their own con-
viction that there was no prospect of
disposing of their large holdings at a
profit. where there was the danger that
conditions might develop which would
necessitate still greater sacrifices in or
der to dispose of them. The conviction
gained ground that prices had been push
ed too high even to discount the many
favorable future developments expected
The high level of prices were generally
perceived to be due to large buying by
powerful speculative combinations which
did not represent investment demand for
permanent holding Besides buying these
large holdings, the speculative combina-
tons had exhausted every device of ma
nipulation to lift the price level of their
securities in the market. 1t was real
lied also that borrowed money represent
ed the sources by which these enormous
blocks Of stock were held on margin The
was thus one of a threatening
weight overhanging the market and liza
BILE to be precipitated upon values at any
time. The market values of securities
were thus distrusted as an unstable basis
for credits. This distrust has been plain
ly manifest on the part of the foreign
re q sd st. II
ties in foreign markets has fallen to
neglible quantity. Foreigners have loan
Ell money freely to American bankers.
which has been employed by syndicates
in the fiotatbon of many new securities.
but they have looked 10 old and tried
securities as collateral for their loans
and have shown no disposition to en-
bark their money In direct investments in
new American securities. Considering IT. >
large amount of idle capital abroad, par
ticularly in France. the diminished trad
balance in favor of Ibis country and the
large sums due foreigners by American
borrowers, this refusal of our securities
is notable. The result has been that un?
derwriting syndicates undertake. to dis
tribute their new securities they find
little disposition among foreigners to
make them a resulting necessity of find
ing other means to liquidate their Amer
lean indebtedn ass. II Is a fact that home
market for new securities has also been
slow. This means that the large syndi-
cate resources embarked in new fota-
tons are not in a very liquid state and
the capital involved is to certain extent
locked up or fixed The necessity for the
formation of i syndicate - take over
some one of the newer trust companies,
its holdings of securities of one Of the re-
cent Industrial combinations which was
revealed last Saturday after the week
business on the stock exchange had clos
ed was taken much to heart as a prob
able symptom of a general condition.
The enormous new capital issues of the
last year or two, including issues of
bonds secured by collateral OF railroad
stocks bought for control at record prices,
makes financial sentiment sensitive re-
garding these issues. The feeling crystal
lied this week that liquidation, already
being delayed. was inevitable and 1t was
with some degree of pre-
cipitation and no doubt at considerable
sacrifice. That the fabric of credits as
well as the values on which they rest
are much improved in health as the re-
suit of the weeks events Is the universal
sentiment In the financial district. A
feature of the present situation
Is the entire disappearance of rumors of
new combinations and of absorptions and
of uneasiness on the part of controlling
wrested from them over night. This is
in striking contrast to the order of
things when the Northern Securities
Company was formed and again when
control OF LOUISVILLE ana NASHVILLE
passed as an episode in a speculative
campaign in the stock. 1t is matter of
course that with enormous selling of
stocks there must be enormous buying
but concentrated dealings in any one
stock no longer arouses the suspicion
that some one is buying for control. The
reason is that capital outlay in the new
fotations has become overextended and
the market has become slow. The I'M
derwriters and supp orters have sufficient
IN do IN fha0n ms nd
there have been signs that this was
high grade stocks to accomplish this,
holdings which had been accumulated.
in some cases. to attempt controlling in
fiuences in the properties. This relieves
the insiders from the necessity they have
been under to hold prizes at high level
to discourage bu' ing for control. There is
ra Their an INDICTMENT to connive at de-
clines in prices IN order to help force
out rival holders who are under pressure
to liquidate. Each day in Wall Street
sees a new crop of rumors of cunning"
against one or another group
long on certain stocks. Former uncer-
tainties continue to hover over the mar
ket including the possible gold exports
and the probable delay of the period of
the general return flow of currency from
the Interior and have helped to keep the
market nervous and unsettled. Bonds
have been under pressure, but have not
been so freely sold as stocks. U. s. 3s
and IS declined IA, the new As l-2, the old
Is "a and the Is l per cent. as compared
with last week closing call.