The Montgomery advertiser., 1903-07-26
THE MONTGOMERY ADVERTISE
WALL. STREET REVIEW
MARKET IS FEvERIsH AND Ex-
 CITED THROUGHOUT.
The Day Passes Without Announce ments of More Failures, But
 It is Known That Difi-
 culties Exists. "

VI tWo important eNcnanRe nf1nS yesterday and the dread that those failures would have a quel in the suspension of other embarrassed nrfns. Throughout the wild fluctuations in prices of specialties. the standard stocks showed evidence of the same kind of absorp- tion and comparative stability which character ized them in the market of most of the week. before yesterdays failures had excited and up- set the market. The day passed without an- nouncement of additional failures. Despite the fact that no deliveries on contract are re- quired on security and that loans made on Friday carry over until Monday, thus giving a breathing spell for hard-pressed firms. the absence of announcements of failures was not entirely reassuring to the adjustment of difficulties. That such difficulties exist is now pretty we'll understood. But the general knowl- edge of the existing difficulties and of their location seems to deprive the situation of much of the disturbing power which the previous mystery possessed and did not check the ab- sorption above referred to. Part of this buy ing is by shorts taking their profits and 1t Is highly probable that part of 1t Is also by banking interests who concerned in taining values. But it is reported that there is also evidence of inevstment demand both for domestic and foreign sources in the belief that the abnormal speculative situation here has resulted in forcing prices to a decline as artificial in its way, the imitation which preceded 1t. and largely has caused 1t. The general market sold off again on the bank statement, the report of an actual increase in the loan account in view of the weeks violent liquidation is considered nothing less than founding. The pressure for credits which could have produced such result must have been enormous. although it is recognized that the situation of the banks must be strengthened by the additional collateral and the Improvements In it's character, which has undoubtedly been exacted. The bank statement was. neevrthe- less. sufficient to make the closing in stocks weak and there was late pressure also upon bonds. The convulsive contraction in prices of many specialties was recognized as being due in many cases in closing out of collateral for loans of the failed firms and of the stocks affected confirmed the plaint of the m connected VpgtpTdaV'S principal failure that even investment stocks are unsaleable in the present market, Some of the other colapses served to direct con clusions to the neighborhood of other troubles against which struggles are making. con siderable list of declines ranging from 5 to 239 points could be complied
 There has been continuance of liquidation in the stock market this week. but 1t has been more scattered and irregular than in the pre- ceding period. The active dividend-paying railroad stocks have been less affected and have shown resistance to the depression. So far as they offered there was better de- mand for them and the market has been With out the entire apparent lack of support which characterized it at times during the present liquidation A large part of this buying was from the short interest. News from the busi- ness world at large has continued highly fla vorable. and until Fridays failures of Stock Exchange firms, nothing appeared to account for the shrinkage of security values aside from the announcement of failures in the building trade after the middle of the week. which served to renew the nervous tone of the speculation. The precipitate decline in the iron and steel stocks and especially of the United States Steel stocks to a point below that touched in the panic of May 9. 1901, was another dsquieting influence. Statistics of railroad traffic have shown the movement of merchandise on unprecedented scale and railroad officials profess expectation of all the business for the rest of the year that their expanded facilities will be able to take care of In some quarters there is even some year of car shortage and freight hlockades, in rope tition of last years experiences, Reports or railroad earnings haev been generally faVor- able and the action of the Erie directors In advancing the dividend on the first preferred stock from a 3 to a per cent basis was ac- cepted as an impression of confidence or the maintenance of the level of earnings. The con dltion of the crops has warranted the hopes of A large veld of wheat and corn although the Weather Bureaus bulletin for the week was not entirely reassuring as to Spring wheat and reports of hot winds in the corn belt made an impressiOn on stocks at one time But the fact of the urgent liquidation was obvlous and the mystery of it's sources and causes add ed to its influence in unsettllng confidence: That the unwiedly commitments in douhtfnl enterprises in face of the necessity for the employment of large funds In active business and in railroad betterments and improvements Is at the bottom of the trouble Is generally recognized. But the fear has grown up that the shrinkaQe in securities values and the dlf- faculties Of the money market will themseleVs react on the general situation and prompt the abandonment of enterprises which arc relied on to keep up the demand for commodities. Such tendency Is suggested by the lntllna- tions that various railroad companies are modi- fying plans for betterments, owing to the difficulty in securing money for their prosecu- tion, The possibility of contraction in the consumption of iron and steel products from these causes has played m important part in the weeks pressure upon the steel stocks. The financial community has been bewildered in the effort to find basis for estimating a nor nal limit for the decline, but has received no light in the development of any considerable investment demand such as is looked Tor at
 II.l f.,N-t -t,xg4n 1Nng hiS hn led to a series of conjectures whether the per cent rate ruling in the money market for anw longer date than six months is to be looked to as the basis of return for investment in se- curities.
 With a per cent. rate for long time money there Is undoubtedly some conversion of sc curlties into funds for placing in temporary loans. But it does not follow that this pro would be pursued down to price leNei for high grade securities that would ylelu only per cent. Very few railroad oonas or a high grade are yet down to even a per cent basis It Is to be considered whether the ruling 6 per cent. rate for money IS que to such active and profitable business condl- tons to offer an assured margin or pront in its employment at a per cent. interest rate or how far, on the whole. urgent emer- gencies, based on previous commitments anu involving credit of capitalists or the saving or greater losses have made the present money rate Many examples are known ana others are suspected where the liquidation Is forced to save the loss of more. The fact that great railroad corporations are borrowing millions on their notes in time loans at per cent. rather than offer the securities which they have in the present market is adduced to show that the financial world does not expect nresent money rates to hold and adopts tenn porary expedients to postpone the offering of securities which must ultimately be sold Meantime Wall Street simply waits for the Iauidation to exhaust itself with no very definite opinion of when that will be.
 The bond market has reflected the liquidation in common with stocks, but with no such vol ume or urgency United States bonds were un- changed on call for the week.