New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1903-08-10

" LOW RECORDS MADE IN SECURITIES
Bank Loans Increase While Reserve ContqctsRoad Earnings
Heavy Prosperity Not feed By
THE WEEKS OPERATIONS IN STOCKS.


terests week or more ago that prices had
doubtless touched bottom Friday, July "a.
appeared at the time reasonably safe, but the
course of values last week showed the utter
futlity of attempting to judge the current stock
market on the basis of sense or reason. There
is little use in bringing forth sound arguments
for higher quotations when a trust company.
for instance. makes sacrifice of collateral held
against loans, thus creating panicky feeling
among all borrowers, and weakening houses
shat only need a little help in order to right
their affairs. Nothing stay a decline when
loans are sold out regardless Of the price offered
for the stock collateral There was needless
sacrifice Of securities by concern that should
have exercised fits moral privilege rather than
its legal right and in doing have served to
steady the situation rather than disturb it.
Many firms that had loans outstanding against
rapidly depreciating stocks were protected by
the banks and trust companies. as the COM
mon iutelligence OF the heads Of these institu-
tons and their appreciation OF their moral re-
sponsibilIty for preserving the situation from
ruinous bankruptcy made the path Of duty
plain.
The week opened with prices tending lower.
ending in acute Generalization on Wednesday,
followed by further Generalization Saturday.
when quotations reached the lowest level Of the
year and for the last two years. Two failures.
making six sc far reported in the current mar
ket. were announced. while the Street was
flooded with rumors affecting nearly every
prominent house in 1t. Needless 10 say,
few Of these rumors had any basis. Several
well known houses reported in trouble were
lenders Of money when adverse rumors were
going the rounds about their financial position.
There were however, some firms on the ragged
edge" and had it not been for assistance ex-
tended by powerful financial interests they
would have been forced to go down under the
pressure Of declining prices. 1t is impossible to
say whether or not last weeks decline marked
the low level of the year. but the character of
buying on Thursday encouraged the Idea IN
some quarters that more stable conditions would
develop. The decline Friday and Saturday,
however was discouraging. A large amount of
money was thrown into the market on Thurs
day, but no one can tell whether this was done
in order to give temporary relief or whether 1t
represented the be-inning of a campaign for
higher values. One Is CeIldluI 4iONCNCA'
namely, that stocks cheap at the present
level and are many points under their real in
vestment value
Conditions governing the intrinsic worth Of
securities present no evidence of weakness. In
deed. reports from the business centres Of the
country indicate most prosperous situation In
trade. with signs Of further expansion in the
course Of the next twelve months. Wall Street
apparently has not reached the position where IL
can look forward TO a promising future but
elsewhere in the country people who are en-
gagged in various lines Of work are satisfied with
the present position Of business affairs. and
with the outlook for industrial activity in the
course of the next twelve months. If the stock
market were in a sane condition the various
current favorable developments would have an
effect on prices. For instance, the annual re-
port Of the Union Pacific and the June state
ment Of the Pennsylvania Railroad in normal
times would be market factors. Union Pacific
sold at 90 last week, yet the company showed
for the fiscal year a balance. after fixed charges
and per cent on the preferred, Of $11,314,S52
for the common stock. The common stock per
cent dividend calls for 81 $50 500. leaving a sur
plus of nearly 100000, the common actually
earning over 10 per cent. The extraordinary
amount Of traffic now being handled in this
country is reflected in the earnings Of the Penn
sylvania Railroad for June, which show gain
IN gross Of $1,231. 500, and gain in net of
S123. 800 on lines east of Pittsburg, and gain
in gross Of SSSS 900 and gain in net of S77 200
lines west of Pittsburg, comparison being
made with the corresponding period last year.
Money market conditions reflect a growing de-
mand for currency from the interior, weaken
ing in sterling exchange and a possibility Of
gold imports. careful examination of the
present position of the New-York banks will
show that the local money market is in a better
position TO handle the fall demand for money
from the West than it has been at this time
in many years While the loan item, as given in
the weekly statement of the Associated Banks,
still stands at huge figure. it is well to bear
in mind that loans within the last few weeks
have not increased so rapidly as deposits, while
It is also well to the fact that deposits are
now nearly heavy as loans. The foreign ex-
change market was lower for all bills last week
Continental and sterling rates being influenced
by bankers bills drawn against the sale of
Union Pacific notes; also against the sale OF
large amounts OF American bonds abroad. If
the New-York market receives gold from Europe
there will be no disturbance in the money mar
ket, while even If gold imports are not made
there should be serious trouble at this centre.
Call money was frmer in the week being quoted
as high as 81 per cent averaging about 23s per
cent, the higher rate doubtless being due to the
disturbed condition of the stock market In
London there was change in the Bank of
England's minimum discount rate. and no ma
terial change IN any Of the foreign money mar
kets.
Lower bank reserves and an, increase in loans
encouraged liquidation and manipulation in Sat
urday's market. and speculative sentiment ac-
cordngly was much depressed and worried.
PeopIe who own good stocks should keen their