The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1903-11-01
Rally in stocks and Bonds Was We'll
come TO the Banks That We're
Overloaded with Collateral.
SIGNS POINT TO BETTER PRICES
But THE IMPROVEMENT IS LIKELY
TO MOVE WITH LEADEN FEET.
Speculation as to the Future OF Cop
per PrOperties-Incren in MIMI
Der of Security Holders.
Special to tn. Indianapolis Journal

Speclal 20 the indianapolis JoCrral.
NEW YORK. Oct. 3l--Banks here and
chance to get rid OF considerable collateral held
by them for account of friends and clients The
rally in the stock and bond market was not I'M
Welcome to the banking institutions. It
abled them to tighten their loads materially.
There times when banks can become over
loaded with securities, and when this class Of
collateral becomes almost as undesirable and
unsafe as real estate in OF depression.
There has been a narrow escape from dan
gerous situation In this respect but the money
lenders are emerging from their difficulties. and
conditions are decidedly improved. from the
conservative banking view point. The institu-
lions and individuals who have been selling
their securities to raise money and reduce their
obligations include those of all sizes and grades
OF Importance. The result IS an accumulation
OF cash in quarters where there is an absolute
necessity for capital to be earning money. and
these interests find themselves confronted with
the lack OF q desirable borrowing demand. This
condition accounts for tho inquiry which has
sprung up for bonds. inquiry urgent that
II has stimulated considerable speculative activ-
ity In that quarter. Many experienced traders
have been putting their speculative capital in
low-priced bonds during the last month. be-
neying that good returns can be secured on
that kind of investment quite as well as on
stocks. and that the outlay would be attended
by less risks. Results have proved this to be
the case. Insurance companies and savings
banks have been the largest buyers OF bonds,
and many millions OF dollars Of their cash have
gone into that class of securities Insurance
busy, and savings banks, in order TO
meet obligations to their clients and pay inter-
The belief is growing that the underlying
tendency OF stocks and bonds will be slowly In
the direction Of better prices Ii is the expecta-
ton that this Improvement will be exceedingly
gradual and will be felt first and strongest
among the low-priced stocks that give best
promise or probable development looking TO III
innate dividends. There are many such which
are selling all the way from 20 per cent. to 30
price fluctuations for the next few months will
be within narrow ranges and that there will be
BANKERS and brokers' anticipate this condition Of
things and are planning for rather tiresome
Wa :rsss ia setting sfhe ao9 20 S wait own sSes
much patience possible for the rest of the
country to go through a similar experience; This
process is clearly going on and time will be
quired for completion OF the liquid1tion.
ton by those whose judgment is OF greatest
value is that the country is in no immediate
danger OF a serious and protracted reaction 1t
is now almost certain that the worst is in
the securities markets and that the remaining
thing OF a chill on ndustrials and the great
mercantile trade the aggregate volume OF bust
the best feature OF the situation as 1t has de-
veloped is reasonable certainty that the wave
organized labor ma and sixen eaptaf seme asup o.
ance that IL proceed with construction en-
by walking delegates and their associates La
Dor unrest has been, for year or more, con-
ness situation. end now that a check has been
put TO the so-called unreasonable insistence OF
the agitatorS in that field permanent peace is
looked for something which must inevitably
work 10 the general good. AZ Is ume that the
were giving themselves season for sober re-
re@psb a ten %ork in feW ontb 20 Se
pace was too fast.
Analgamated Copper has contributed to the
enlivenment OF the wall-street situation all the
week. That stock was "pegged'' by the Stand
ard OIL specialists in control OF the property.
and to the surprise Of many professionals IL
experienced sharp advance after the adverse
Montana decision. instead Of breaking all to
pieces as anticipated A big short interest was
squeezed, and now the talent is I'm doubt as to
what course that property is likely to take in
the future In the metal market the price
Of raw copper has been washed up both
here and in London on the theory that sus-
pension OF operations In Montana will lead to
an exhaustion Of supplies and the establish
n ment OK quotations on permanently higher
for the metal at the advanced figures made and
that the play is entirely manipuative. Special
trouble in making it clear Why that PaFtie9iar
stock should rise, as q sequence TO entire stop
Grating e on might so soeg aF ha e
the stock is entitled to a 5-pont advance be-
cause the mines shut down for six months II
is logically entitled a 90 or hotpoint rise
should the mines be abandoned altogether: The
put Amalgamated back to $3.50 a share But.
then. operations In Wall street are not con,
At present quotations the Amalgamated Cop
per properties have a market value OF. approx
years ago or thereabouts-a shrnkage OF more
than sl45oOoO oo 1t is notorious that the insiders
around top figures They may have rein1ested
at the lower levels. but upon that point there
Should be ADVISED limited extent as to T he
facts. Copper experts are widely at variance in
their estimates OF the future Of the Montana
copper properties; Some hold that they win be
n sbanGGnsd IN the ns1t fen year,
be in the territory partly occupied by Senator
almost as great as Mexco ciarks untsd
Verde properties are said TO have over $500 0o0.
SS so to- S S N neh OF MhGs
copper becomes "a. a 5y-pToasct and can be laid
Clark is n member of the copper combine. but
IL IL pays him best TO break away from that
ganization he may be depended upon to do SO.
Thus far he has been merely burrowing in his
United Verde mines When he gets the property
developed sufficiently make IL an object he
can cut loose production and command the
trade OF the world. The senator Is the dyEa-
the moment dormant must not 81. accepted as
proof that he viii always be in a nonexplosive
state
The statement made by authorized rail-
road bureau Of Information that there are. APP
proxlmately. 10000 owners or tho stocks and
bonds Of railroads in the United States con-
firms the claim frequently made ia these let
tiers that the number OF security holders IN this
country IL In excess OF 1000 900. 1t is entirely
safe to say that the stockholders in industrials
humber at least 10000 United States Steel
alone has round 0ooo American Sugar Re-
iineries has the next largest list or sharehold-
ers. with Western Union close third. Recent
computations show that the shrinkage i'm
oustFials during the last two years amounts to
81 100 Oc0 ooo The shrinkage in railroad securi-
/ Ties during the last fifteen mentbs Is In excess
| OF that amount. approximating s.. 600 0e0 0o0
| How much OF this depression is paper loss
and how much actual loss TO the speculative
community can never be known. There is no
way OF making a division between the perml-
4 nent investment class and the speculative ele-
ment.
|
Wall streeteTs have been taking very lively