The Indianapolis journal., 1902-09-24
LIQUIDATION Is DRASTIC
LOANS CALLED HEAVILY AND
STOCKS ARE THROWN OVERHEARD.
Result Is N Severe Tumble I'm Prices
ThroughOut the List-NO Monetary
Relief Is I'm Sight.


was subjected to drastic liquidation to-day,
and spectators of all classes, from the
smallest to the greatest, threw over their
holdings with increasing signs Of disorder
There were few pauses in the activity of
the selling. but whenever the bears COM
menced to bid for stocks in the fear that
they were overextending their short ac-
count it proved so easy to get stocks that
the offering down Of prices was constantly
renewed, with a constant uncovering Oh
fresh stop-loss orders which tumbled stocks
on the market in heavy volumes. The clos
ing was furiously active and with prices
still pursuing rapidly-downward course.
The growing difficulty of borrowing money
to carry speculative holdings of stocks on
margin was the root of the trouble. Yes
terday's moderate calling of loans by the
banks, instead of relieving the trouble
seemed to aggravate it. The disturbance of
the money market was due in some part to
the operation of the forces of relief, which
were through new and unaccustomed chan
nels. Thus the high rate for money result
ing from yesterdays loan contraction Of
fered an inviting opportunity for all who
had available deposits in the banks to
draw out their deposits and replace them
on loan In the stock market. This was
done by many classes of depositors all the
way from those with private accounts up to
the large banks of the interior which keep
millions on deposit with New York banks.
This process, il carried out in thoroughly
systematic and orderly manner, would con-
stitute simply transfer Of book accounts.
No increase or decrease of the supply of
loanable funds Is involved, but the deposits
withdrawn from the banks to be loaned had
to be replaced by heavy calling of loans put
out by the banks. This shifting process
was largely responsible for the continual
fiurries in money. The sentiment in the
street was decidedly upset by the conviction
that no relief is Immediately available for
the stringent condition of the supply of
money. The early contribution OF nearly a
million dollars to the market through the
subtreasury operations was nearly wiped
out by yesterdays customs collections, and
to-day there was deposited at the sub
to Chicago, and $4,000 for New Or
leans. While part of the Withdrawals
of deposits by interior banks were re-
loaned here, other sums were shipped away
by express to meet the crop requirements.
The drop in New York exchange at Chi
cago from par to 20 cents discount reflected
funds, notwithstanding the higher level
of money rates 1t was noticeable also
that the sterling exchange rate failed to
yield to any material extent. The jump
in the prices of wheat and cotton has
checked the export buying and the making
of private exchanges. Private discounts
in London rose above the bank rate to-
day, and 1t Is generally expected that the
bank rate will be advanced to 4 per cent
on Thursday and such other obstacles in
terposed TO the movement of gold to New
York as are possible. The amount of COM
mission exacted by brokers for time loans
Is growing, and there are complaints of
scarcity in other departments of the money
market, owing to the Withdrawals to take
advantage of the high ruling rate for call
loans.
prices of securities involved calls for ad-
ditional collateral on loans, which was a
further factor in the pressure in the money
market. The confidence in values, which
has been so presistently maintained, re-
ceived a decided setback in face of this
combination of circumstances. At least
one powerful speculative combination liqui-
dated accounts to the extent of between
$4,000 and 100000 shares of various stocks.
most largely of Missouri Pacific. One of
the most important mainstays of the
cent market was thus withdrawn. An
opening lift OF two points in st. Paul was
the only important attempt to contest the
declining tendency from the start Last
prices show that the most important stocks
are from two to three points lower than
they were last night. The downward i'm
pulse to stocks caused some additional
weight TO be given to the reports of dis
orders In the coal region, unfavorable
crop reports both for grain and cotton and
the strained relations between Great
Britain and Venezuela. but the money situ-
alton overwhelmed all other conditions
Bonds were active and weak. Total sales
at par value were $5,545,000 United States
twos, coupon, and the threes advanced II
per cent, and the twos registered, de-
clined " per cent. on the last call.
he foil fahI