The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-08-17
MONEY MARKET OUTLOOK
A DETERRENT INFLUENCE IN THE
SPECULATION IN STOCKS.
No Doubt of the Substantial Basis of
the COuntry's Prosperity-The
Week in Wall Street.

NEW YORK, Aug. I6-To-day's bank
statement reinforced the admonition of yes
terday's S per cent. call money rate as TO
the narrowing resources Of the local money
market. In spite of the relief afforded by
extensive transfers Of loans to foreign
lenders through the medium of the ex-
change market. the large local require
age of bank loans to the extent of 81 .653,O 600.
The stock market was dull and profess
sional throughout. There is no loan market
on Saturday, and the practical effect of
the bank statement on the money market
must await the opening on Monday. 1t is
clear that higher money rates are indicated.
There was a continuance of the aggressive
bull movement in the Toledo. st. Louis &
Western stocks, but they reacted sharply
with the generally heavy tone developed
after the bank statement. st. Louis
Southwestern preferred was rushed up 10
IA over last night just before the close.
Southern Pacific and the Western stocks
generally were subjected to profit taking.
The reported intention of the Southern Pa
cifc directors to ask authority to issue
500. 10000 Of bonds to improve the property
is given as an explanation of the recent
strength Of the stock. The market closed
heavy.
The country's brilliant crop prospects and
the danger of a stringency in the money
market this fall have been the conflicting
influences in the stock market this week.
The week opened with the latter influence
decidedly in the ascendant. The bank state
ment, published last Saturday, while the
Stock Exchange was not in session, re-
vealed so considerable an inroad on the sur
plus reserves of the banks, already at an
unusually low figure. that a disquieting SEN
timent made itself evident in free offerings
of stocks. The maximum interest rate,
which had not exceeded 3 per cent. for call
loans, ran up to 4 per cent, and the ma
Jor1ty of call loans have been placed at
that rate during the week. Then the pub
lication of the Agricultural Departments
crop report and the export estimates, based
on its figures, turned the tide of sentiment
toward the bull side. There was some later
relief from apprehension over the money
situation wrought by the abundant supply
OF foreign exchange bills. indicating new
offerings of foreign capital in the local
money market. Rumors of important new
railroad combinations were renewed, and
the operations of powerful speculative pools
gave the market some animation. The APP
pearance OF the market has been somewhat
49,
money market have had rather a ubduing
influence on enthusiasm. The government
crop report seems to warrant the belief that
the grain harvest of the country will pass
the previous maximum. The foreign re-
quirements are not yet so clear, but II is ev-
ident that we will have a very abundant
surplus to send abroad.
Railroad authorities from all parts of the
country report a very large current traffic
and a prospect of all the business in the
future they have facilities to take care of.
The extraordinary demand for iron and
steel continues in excess Of the domestic
capacity and imports have to be made to
meet requirements. The anthracite miners
strike, the only really unfavorable feature
of the situation, is a factor in restricting
the output OF iron. Preparations of in
creased means of production will do away
with the necessity of imports of iron be-
fore long. Jobbing centers report a strong
inquiry for fall business, bank clearing,
throughout the country are large, and all
other signs agree In the promise of un-
varying activity in trade and industry for
the coming season. High money rates un-
der such circumstances are the natural
sign of profitable use for money in all sorts
of ways. There is no restriction OF credits
or doubts Of the soundness of business
condition. to account for the high interest
rates which money commands. But in the
case OF securities which may be held al
artificial levels by means of borrowed
money there is the danger that a withdraw
al of credits from the spectators would
leave the stock market without sufficient
support of prices and would lead to col.
lapse. Experience ~abundantly proves that
a steady interest rate at not exceeding
s per cent in mercantile affairs is possible
even while money rates on the Stock Elk.
change for the purpose of holding Sc.
curities on margin are soaring TO panic
figures. 1t is clear that the demands on the
money market this fall will be unusually
large. At the same time the Indebtedness
to foreigners is known TO be EXTRAORDINARY
large. Syndicate borrowings abroad early
in the year may be presumed to have beer
predicated on the maintenance of our ia
vorable trade balance of last years level
Instead of that the excess of our mer.
chandise exports over imports for the sever
months of the calendar year is S133, 325, So:
less than last year. In consequence there
has been a very extensive renewal of for
eign borrowings to later maturities. This
short interest overhanging the exchange
market has deferred prospective shippers
of merchandise from Offering bills against
these future shipments as the possibilities
of covering at a profit when the crops move
is much diminished. But while the trade
balance in our favor has thus materially
been cut down, IL has still mounted to the
substantial figure of $191, 455, 761 in the seven
months last past, and is substantially
added to with every passing month. The
prospect for the export demand for the
coming crops indicates that the increase IN
our trade balance will be largely accel-
Grated.
prised the features in that department
United States twos advanced IA. and the
threes, new fours, registered. and fves ~
per cent. as compared with last weeks
closing.
Following are Saturdays share sales anc
the recorded price changes:
High Low Closin,
Atehison .-:""-."." $500 s2h % Wy
esItiTnra e Ohio 3oo ia ,oa;; w.