The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-09-29
DAY OF WIDE CHANGES
FLUCTUATIONS IN STOCK PRICES
ARE MANY AND BROAD.
Brief Help Given to the Market by the
Bank Statement-COnditiO
During the Week.

NEW YORK, Sept. 27.-There was very
feverish trading on the Stock Exchange
to-day, which seemed principally due 10
contest between opposing speculative inter-
ests The pool operations which were re-
sponsible for yesterdays sharp upward
movements were again in evidence at the
opening, but the high prices made attracted
renewed liquidation, induced by misgivings
that the bank statement would fail to re-
veal the recuperation which was expected
yesterday. There was heavy break in
prices in progress when the bank state
ment appeared, showing surplus reserve
re-established of s3.236.625. The bull OPP
orators thereupon turned on their oppo-
nents and marked up prices Y to 1 point
at jump. so that the level of the market
was sent back to near last nights level,
and, in some cases. above. This was fol-
lowed by another relapse which carried
some stocks lower than before and made
the closing feverish and unsettled. Louis
vile suffered to the extent of Az in the
late break. owing to the uncertainty
whether the minority stockholders are to be
allowed to share in the terms which it is
reported will be offered for control by the
Atlantic Coast-line syndicate. st. Paul suf-
fered an extreme loss of over points on
account of delials by officials of published
reports of proposed stock subscription
right. The dominant influence was the
money situation. The increase of 81 100. 700
in cash reserves of the banks was total
surprise in view of an indicated decrease of
about 100000. On the other hand. the
large as had been looked for. The source
OF the cash Increase was unexplained
mystery. A sharp fractional recovery in
the sterling exchange market, unusual for
Cot xral1 f~<.t~ fhn
gold import point. The bank statement
failed to convince spectators that the
necessity Ter further loan contraction has
entirely passed.
Heavy liquidation of securities has been
forced in the stock market this week, by the
calling of loans by the banks to make up
the deficiency in their reserves revealed
by last Saturdays bank statement. The
market .steadied and recovered somewhat
In the latter part of the week on the hope
that the loan contraction had been carried
as far as is Immediately necessary and that
the offer of the Secretary of the Treasury
to pay now all the government interest due
for the remainder of the fiscal year less a
rebate of GAG per cent, and to purchase
bonds, would relieve the money Stringency.
The stringency of the money market was
solely responsible for the weakness of
stocks. and this was in part due. to the
large requirements for currency and credits
which are an incident of active business.
Ample warnings have been uttered by all
competent authorities of the conditions
X,
lack of sufficient resources to carry through
the large speculative commitments in the
market has been clearly foreseen without
affecting, however, the confidence of the
speculative contingent that means of relief
would be forthcoming. This contingent
has claimed that the United States treas
ury would be bound to afford ample re-
lief to the money market; that a rise in the
money rate would Immediately bring in
gold, or that the supply of money in the
country was already so great that the usu-
al demand on New York for money to move
the crops would be RENTED this year. The
fact was ignored that all legal means of
returning government funds to the money
market require the security of government
bonds and that the available supply of gov
eminent bonds has become so depleted that
the banks not able to increase their
holdings for the purpose of placing with the
government as security. The wel-adver-
tised fact was also ignored that the obi
cations of American borrowers to foreign
lenders were already so great that imports
of gold must necessarily represent bor-
rowings, for which price must be paid.
The one point of view of the specula-
tors was that the country was in a condi-
ton OF unexampled prosperity, which prom
ised a continued demand and increasing
value for securities. Powerful combinations
of spectators, some of them commanding
all the way from $3.50 900 to s5O000,O0O, ac-
| cording to competent estimates, have long
been engaged in taking all the stocks
they could carry with all the money they
could borrow. The cheapness of call money
| funds, stimulated this disposition, although
| this receptive cheapness was in itself due
to the expectation of a rise in money rates
for long periods, and the desire of bankers
to keep their resources in readily available
form. The large holdings of stocks thus
taken on had the natural effect of lifting
prices of securities, but they were not taken
| with the purpose of permanently holding
but simply margin to feed the more sub
stantial investment demand expected to de-
velop. So long as the banks left the credits
/ .t2l.&
stocks this condition might have been
maintained indefinitely. But the deficit in
| bank reserves developed last Saturday and
the inability to replenish the cash so as to
alternative but to demand the repayment
of loans. The high money rates which re-
suited tempted depositors of all classes to
| draw down their deposits to place them in
| call loans on their own account, instead
of accepting the comparatively meager in
terest paid by the banks on deposit. The
banks were thus compelled to extend the
process of calling loans, and the money
market was thrown into disorder.
The process of actual depletion of re-
| serves has, meantime, continued, though In
diminished degree. The governments Gus
toms returns have continued to run over
| a million dollars a day, practically all OF
which are payable direct from the New
| York banks into the subtreasury. and the
| demands from the interior for purposes OF
the circulation have continued. Only in
| ternal revenue and miscellaneous receipts
and these are running light. The stringency
| of money has caused some weakness OF
| foreign exchange. but has not depressed
the rate again to the gold import point
1t has been the experience with former
! offers by the Treasury Department to an.
| ticipate government interest that they
| brought little response from bondholders
1t is considered improbable that the banks
will put out again in the stock market the
| loans which have been recalled from Lon.
| don this week. For these reasons the
| opinion over the future of the market anC
its effect on the stock market is still un.
| certain.
Speculative bonds have been freely sole
during the week and some high-grade bonds
have also reflected pressure United States
| twos, threes and fives and the old fours
coupon, advanced Il and the old fours. reg
ular, " per cent, as compared with tht
| closing call of last week.
The following table shows the range OF
stock prices on Saturday.
IGranger Farwen & Co.'s telegram
! Stocks Open High Low Clos
| INDUSTRIALS- ing est est ing
Am. Car & Foundry ......... 365. 36L rs as
| Am. cast iron flpe.....-.. l0Lx 15es 15k
| Am. Cast Iron Pipe pref. 561a 57la 56i. 5-i