The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1902-08-30
CONFIDENCE REVIVED
STOCK MARKET BRoADENS OUT
INTO ANIMATION AND
STRENGTH
THIS IN SPITE OF AN
ADVANCE IN THE CALL LOAN
Bank Statement Is Expected to Show
Cut of Nearly Six Millions in the Re-
serves-Comments on the Increase of
the Bank Note Circulation.

NEW YORK. Aug. 29-There was a
considerable revival of confidence indi-
Gated in today's stock market, and in the
final dealings the market broadened out
into animation and strength. This was
in face of a rise in the call loan rate to
5 per cent and a forecast OF the bank
statement tndicat ting cut in the reserves
of nearly Sc, O00, 00o The immediate pros
pect in the money market seemed to be
overlooked on account OF the reports of
the comprehensive plan said to be favored
by the secretary of the treasury for the
expansion of the note circulation of the
banks, by which ii Is hoped to relieve
the demand upon the lawful money re-
serve for use in the circulation incident
to the crop moving period.
1t will be remembered that the offer
OF Secretary Gage to redeem bonds made
IN April of last year had resulted up to
the 1st of January of the present year in
the redemption Of government bonds to
the par value of SIS. 222. $50, and in the pay
miuns of s71.744, s42. These disburse-
mentS were an important influence IN
maintaining the tranquility of the money
market last fall but the governments
standing offer proved so attractive that
the banks began to sell bonds and retire
their circulation in the spring as rapidly
as the law would allow. This was neutral
iZing the purpose Of the bond redemp-
lions. so that Secretary Shaw withdrew
the offer early in March.
Cause of Bond Prices.
His efforts to stimulate the note ex-
pansion are evidently due to a recollection
OF the conditions thus caused by the re.
demption of government bonds. Prices Of
bonds have declined materially since the
withdrawal of the governments redemp-
ton order. They have risen again since
the note expansion plan was discussed.
and today the bid price OF - OF 1873
jumped Isl per cent. indicating the scanty
floating supply and the difficulties of bank
note expansions.
of the discussion of this project was sup
plemented by the belief that the language
of the circular issued by the Southern
Railway voting trustees could be accept
ed as indicating the incubation of the
project for q Southern railroad merger.
There were the usual rumorS also of an
early settlement of the anthracite coal
strike The buying of Union Pacific was
attributed to a desire on the part of
insiders to encourage conversion of bonds
into stock. There were some points of
stocks reacting sharply. American bicy-
Gle securities, including the bonds upon
which action on the interest Is expected
on Monday, were notably weak. The SELF
ing was accompanied by reports that 1t
was due to liquidation, induced by the
coming retirement of leading interest.
Northern and Canadian Pacific were con-
Spicuous for activity and strength. and
there were gains Of a point or more by
many less active stocks. The bond mar
ket was firm In sympathy with stocks.
Total sales. par value, -, 100, 0oo-
Back Over the Week.
The average level Of prices for stocks
has advanced this week, but a detailed
inspection of the changes shows them to
have been very uneven A powerful and
Influential speculative combination has
made determined efforts to advance prices
and to awaken a general speculative in
terest in the market. Their method was
to concentrate their buying and n1anipu-
lation on one stock or small group OF
OF az q time nr0Caa7InQ from 10
another on each successive day. On each
day of the week the business in some one
stock has quite oyershadowed the rest OF
the market. Following the advance there
was in each case heavy realizing. which
carried the price back while new point
OF strength was developed
These movements had no SPECIFIC new
development to account for them and
the campaign was avowedly based on the
general promise of prosperous conditions
for the country for the coming year by
reason of abundant crops and undinnin-
ished business activity. The movement
encountered several obstacles during the
week, but the market offered good resist,
ance to the various reactions, as good
buying demand developed in the course
of the declines Most solieitude was ex-
pressed at various times over the capac-
ity of the money market to carry the
speculative campaign through the period
of expansion in the needs of the circula-
ton, the heavy movement OF funds to
the interior reinforcing this feeling.
commence IN money supply
The speculative leaders, however, pro-
feSsed confidence in the capacity of the
money supply, and the call money rate,
by its stability, helped to bear them out.
1t was obvious, however. that the rising
prices were taken advantage Of at all
stages to effect very heavy realizing on
the part of previous speculative buyers.
An impression was prevalent that the
heavy dealings were resulting in the
transfer of holdings from stronger to
weaker hands. It SO happened that two
of the untoward developments Of the
week came in the midst of heavy specu-
lative buying in the stocks Immediately
affected. The reduction of the dividend
on Reading first preferred came while
Reading was being bought eagerly in 1000
to 5000 blocks, with the natural result
of heavy unloading by disguised specu-
lators. which turned the whole market
weak.
The active advance in Atchison also
was checked by the publication of the
report Of net earnings for July, showing
a heavy decrease compared with last
year, but the quick relaxation of the
heavy selling pressure was very notable
in these stocks, as in others, buyers ap-
parentiy standing ready to take unlimited
offerings at concessions. The conditions
which caused this tendency have light
thrown on them by the circular sent to
stockholders by the Southern Railway
IN deferring the declaration of the divi-
dend on the preferred stock, which would
result in the dissolution of the voting
trust
The results Of the past eighteen
months say the trustees. lin connection
with the railroad properties, have re-
veaIed the danger to which corporate
properties are exposed of the control of
their stock being bought up in the mar
ket by purchasers now identified with the
property or permanently interested in its
development and improvement
Want No More of That.
In other words, it is desired to avoid a
repetition of the Northern Pacific and the
Louisville experiences. The same thing
obviously applies to the Reading in which
the declaration of the full dividend would
also have dissolved the voting trust. The
fact that il is considered necessary to
extend the voting trusts in order to con-
tinue the present control OF these proper
ties might be construed as admission that
the present actual ownership Is not suffi-
cient to accomplish this.
1t may also indicate simply an un-
capital which would be necessary to con-
| troll by ownership and which is known to
have proved irksome in the case of other
projects of combination The episode Is
highly significant Of the urgent demand
likely to spring up from one cause or
another, sometimes purely speculative
and to attain sufficient proportions to
| troll of some of the largest railroad sys-
TENS The high level at which prices are
held are due to the same feeling In addi-
| ton to confidence which may be felt in
| the actual earning power of properties to
I make adequate return at present price
/ levels, for which the reason IS not clear
in many cases.
/ has conferred this week upon the question
what substitute will be offered this ar