The Birmingham age-herald., 1902-09-29
FEVERISH TRADING
 IN STOCK MARKET
High Prices Attracted and Ren- dered Heavy Liquidation
FOLLOWED BY A RELAPSE
Dominant influence Was the Money ituation--Increase of $1,78s,7oo Cash Reserves Came as
 Total Surprise.

New York, September 27.-There was very feyerish trading on the stock ex- change today which seemed principally que to a contest between speculative in- terests. The operations which were re- Hponsible for yesterdays sharp upward movements were again in evidence at the opening but the high prices made at .tracted renewed heavy liquidation, in duced by misgivings that the bank state ment would fail to reveal the reeupera- tion which was expected yesterday There was heavy break in prices in progress when the bank statement appeared showing a surplus reserve re-estabhshed of Ss2S6,625 The bull operators thereup- on turned upon their opponents and marked up prices one-half to l 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 followed by a relapse which carried somel stocks lower than before and made the closing feverish and un- settled. Louisville suffered to the ex- tent 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
 
 Line syndicate. St. Paul suffered an ex- treme loss of over points on account of 1enials by officials of published reports of proposed stock subscription right.
 The dominent influence was the money situation. The increase of $b7S9, 700 cash reserves of the banks was a total sur prise in view of an indicated decrease of about $400O,0OO On the other hand the loan contraction of SIS, 352, GOO was not as large as had been looked for. The source of the cash increase was an unexplained mystery. A sharp fractional recovery in t.ie sterling exchange market unusual for a Saturday carried rates well away from the gold import point. The bank statement failed to convince spectators that the necessity for further loan con- traction has entirely passed. Heavy liqut- dation of securities has been forced on the stock market this week by the call Ing of loans by the banks to make up the deficiency in their reserves revealed by last Saturdays bank statement.
 The one point of view of the specula- tors was that the country was in condi- ton of unexampled prosperity which promised a continued demand and in- creasing value for securities. Powerful combinations of spectators, some of them commanding all the way from s15,- 000.000 to S50.000, coo, according to compe- tent estimates, have long been engaged
  carry with all the money they could borrow. The cheapness of call money, pending the season of active demand for funds, stimulated this disposition, ai- though this deceptive cheapness was in itself due to the expectation of a rise in money rates for long periods and the de- sire of bankers to keep their resources in really available form. The large hold ings of stocks thus take on has the nat ural effect of lifting prices of securities but they were not taken with the pur- pose of holding but simply held on mar gin to feed the more substantial invest ment demand expected to develop. So long as the banks left the credits undis- turbed with which the pools held their stocks this condition night have been maintained indefinitely. But the deficit on bauk reserves developed late Saturday and the inability to replenish the cash so as to make good the deficiency left the banks no alternative but to demand the repayment of loans.
 The high money rates which resulted tempted depostors of all classes to draw down their deposits to place them in call loans on their own account, instead of ac- cepting the comparatively meagre in- terest paid by the banks on deposits 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 s customs 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 sub-treasury. and the demands from the interior for purposes of circulation have continued. The internal revenue and miscellaneous receipts can be legally diverted into bank deposits 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. It has been experienced with the former offers by the trade to an- ticipate government interest that they brought little response from bondholders. It is considered improbable that tn. banks will put out again immediately in the stock markets the loans which have been recalled from there this week. For these resolutions the opinion over the fu- ture of the money market and its effect on the stock market is still uncertain.
 Speculative bonds have been freely sold during the week and some high grade bonds also have reflected pressure. United States 2s, 3s, 5s and the old As, coupon, advanced A and the old 4s registered, # as compared with the close of last week.