The Montgomery advertiser., 1903-08-09
WALL STREET REVIEW
SELLING MOVEMENT FOLLOWS THE BANK STATEMENT.
Avalanche of Orders Falls Upon the Already wavering Market. Lowest Prices Generally for
 the Year are Reached.

4 .N
 4,s s ---e-~
 NEW YORK, Aug. e.--The list Of extreme breaks in prices in today's stock market con- veys the best description of the disorderiy selling movement which followed upon the ap- pearanee of the bank statement. Another in- crease of S3932.60o in the loan account of the banks after week of such painful liqui- dation as to verse upon panic at times. upset the newly found equanirnfty of the market and an avalanche of selling orders came into the already wavering market. Prices yielded with downward plunge to the lowest prices gem
 tions 1t seemed due principally to the fact that
 traders were % busy with the active stocks
 as not to have time to spare for the exempt
 stocks. Wall Street has been busy all week
 with attempts to explain last weeks small in-
 crease in loans, without any consensus of opin-
 ion on the subject 90 that today's more for
 midabie increase intensines the obscuritys It
 is likely that the support to the market which
 was accorded on Thursday involved a loosen
 ing of the purse strings of the banks for the
 purpose of checking the demoraiization then
 threatening. It Is also now agreed that much
 of the recent heavy liquidation in Wall Street
 has been for repayment to banks outside of
 Wall Street and to trust companies whose
 showing does not figure in the bank statement
 The result Is to throw demands for renewal
 upon the Associated Banks. Loans made at the
 Stock Exchange on Friday carry over until
 Monday, so that today's demonstration was not
 due to actual further calling of loans but to
 apprehension of next weeks proceedings. Chief
 pressure today centered upon the Pacincs.
 OHtOn F6cAuC RlunEe0 QOWnWnrdS SA points
 to e6h. Missouri Pacincs extreme loss was A, Brooklyn Transit and Metropolitan Street
 Railway lost as much, Atchfson 3H St. Paul
 SM sn,sS and % MSrthwestern ay preferred The last Consolidated Gas was of 7M. Great Northern
 preferred and Delaware and Hudson 4 The rush to take quick profits by the room traders on the short side caused some violent rebounds
 from these low figures. but the market was running oh rapidly in the final dealings again
 and the closing was very weak and furiousiy
 .F ~k@I. .fr~ Aa., = A.
 long plunge this week through the previous low records of the year, thus arousing re-
 newed fears over the shrinkage of collateral
 on loans and prompting its selling out at
 what prices it would bring. The resulting de-
 noralization was arrested somewhat abruptly
 on Thursday. by what cause was not very
 very large buying on that day vas for ac- count of the large banks and individual capi- talists of the largest resources and whose lead-
 ership In any movement in the stock market is great sentimental influence. It was observed also that there was less pressure of lquda- tion of the urgent kind which indicated the
 unloading of collateral forced by the recall of loans, which borrowers were unable to respond
 to. The effect of these developments was &
 swift revulsion in sentiment in the market
 leading to a quick assumption that a coali-
 tion had been formed among the great hanks
 and capitalists to come to the rescue of the
 market by taking freely of offers and by lend
 ing of money and cessation of the selling out
 of collateral which had demoralized the mar
 ket and destroyed its power of absorption.
 This was the first indication in long time
 of any other purpose on the part of the domi- nant financial power than to let the liquida-
 tion take it's course and the market take care
 of itself This prolonged absence of influential
 buying in the market has been the cause of
 great uneasness in itself on account of the
 inferences drawn that the great capitalists
 were themselves largely concerned in the need
 for funds owing to unwieldy commitments in
 great promotions. This inference has been
 ried by assumptions that hostility between
 groups of capitalists has been involved in the
 fall of prices and that projects of absorption
 of the properties attacked lay behind this
 persistent forcing down of prices It was evil
 dent that the disorderly fall of prices was get
 ting beyond control and threatening wide-
 spread disaster and the recovery brought great
 relief rom a severe strain. Things had got
 to the stage where the rapid shrinkage of
 prices had driven out buyers from the market
 while the holders of collateral for loans. sec
 ing the instability of values were eager to
 convert their securities into ready money. The market was unfit to absorb this selling
 which aggravated the weakness and reacted
 again by further shrinkage of collateral These are the conditions of panic and 1t Is an axiom of finance that the only treatment for check ing a panic Is the free extension of credits to afford an opportunity for men to consider and arrange affairs. A sudden contraction of credits involves the certain consequence of widespread bankruptcy. The conditions of tho stock market in the early part of the week had reached almost the opposite pole of the period of the great bull movement. Then there were practically no sellers of stocks at any prices and the continuance or demand without a balancing supply left no limit to the possible | rise in prices without regard to investment return. By the middle of this week there seemed to be a paralysis of the demand for stocks at any stage of the decline, notwith- standing the steady advance in the rate of return on stocks of the highest grade. which was brought about by the decline. So long as buying was withheld and the attempts to H.
 quldate continued. there would be no limit to the decline without regard to the intrinsic value of securities. The exertion of main tv to check a Of will be forthcoming for any new weakness. The affairs and that seems to be what was done
 on Thursday. A considerable uncovered short | interest assisted the recovery If the market after the declining tendency was once over come and hopes are entertained that support | question of the end of the liquidation remains | an open one. The movement of prices has had | little to do with the news of the week. The | sustained level of bank loans in face of the enormous liquidation already achieved Is q | matter of troubled conjecture and attempts | to explain 1t have ranged over wide held without relieving the depressing influence of | the fact. The question of whether the long | shrinkage in prices of securities and the | resulting contraction of credits will react on the general business situation has changed l into the question of how far the reactionary | influence will extend. Difficulties in financing new1S Sprojects in the industrial field, and es- pecially In the iron and steel trade because of
 the money and stock market situation were ad- | mitted and there is a feeling of anxiety over the possibility of coming business and in- dustrial reaction. The critical season for the | crops Is also an unsettling factor, which will | not be entirely removed until the crops are | definitely made. Reports of railroad earnings | are generally favorable and railroad officials report the prospects for future traffic as very | favorable with the question of possible car
 shortage again, looming into prominence. The violent break in the price of Consolidated Gas. on the announcement of a new issue of more
 than S6, ,ool boo of stock and the attention given to current rumors of further large bor- | rowings by railroad corporations is an index | of the sensitive condition of sentiment over | large ahsorptions of available credits by cor l poration borrowings The fact that only two Stock Exchange failures were added to the | list this week result of the slump was accepted as further evidence of an extraor-
 dinary strength in the position which met the | long decline.
 | Bonds weak and unsettled and partly recovered in sympathy with stocks. United | States 2's have declined t. the Ss registered | and old As A per cent on call.
 Bonds.
 YTnItad StafAa rafupdtpc rAG{sfarad InsfL