Evening star. [volume] (Washington, D.C.) 1854-1972, 1903-08-18
LOCAL FINANCIAL NEWS.

Apparently the crisis i'm the New York
stock market has been reached. as Is indi-
Gated by return to higher level of prices.
This condition. it is supposed. will be per-
manent one, and while some doubt as 10
this is expressed by those who profess to
be wise in predicting financial changes. yet
there seems to be a feeling that at any rate
the worst Of the era of low prices Is over
The influence of this change is felt in the
local stock market and is due not so much
to restoration of feeling of confidence
in the securities of home corporations, for
that has not suffered any diminution. but
to the greater freedom impaired to the
speculative element because there is a
letting up somewhat on the restrictions
placed on lOaning money 1t is. of course.
well known fact that there is always a
certain proportion of even the most sub
stantial securities that are bought and
sold for speculative purposes.
This class of buying forms an important
element in the local market as well as in
other centers, and when it disappears a
good deal of the activity goes with it. Dur
ing the past few weeks this has been the
Sltua ton locally, and the listed prices have
gone off mainly because there were no buy
erS. The latter ere largely recruited from
those who buy with the view of making a
turn In order however to do this large
amount of ready money is needed. unless
1t Is possible to get loans from the banks.
When, however the general market con-
uitioHS DtCoINe SOAHeWHdI UCeFtdlH tHe
banks naturally prepare themselves and
decrease their loans so as to be ready for
any demands made upon their deposits and
to get rid of the weak loans, a tightening
in loans takes place. 1t Is impossible to
get money to buy stocks and without such
accommodation a considerable number of
the more active buyers drop out of the
market 1t is maintained by some that the
so-called fiurries in Wall street are
ca stoned by the banks calling in their loans
which are based securities that may be
mainly of speculative character. and the
throwing of these stocks on the market
adds to the decentralization. Then. too. the
banks are criticised for making such loans
as tending to add to the speculative fever.
In the opinion of some there is a miscon-
ception of the functions of banks when an
attempt is made to faSten upon them such
responsibility. A bank is not the guardian
of the morals of a community, nor Is it
called upon to occupy paternal relation
toward its customers. 1t is organized to
make money, and within the limits recog-
nized in all lines of business 1t is matter
of little concern whether the borrower is
a Speculator or not. The point to be deter
mined. SO 1t is maintained. is whether the
collateral is good. and then whether the
bank has the money to loan
Some days ago, when money was hard to
get. the statement was made that some OF
the local financial institutions were curtail-
ing their loaning power by taking advan-
tage Of the higher rates for money that pre-
vailed in New York and sending their funds
to that city. 1t was graveIy maintained
that it was the duty of the men in charge
to keep the money here for local uses even
when 1t earned less 1t is pointed out that
such view is absurd. the duty of the
bank is to do as well as it can with the
funds at its disposal and, everything else
being equal, if more money could be made
by placing loans in New York rather than
here :he course to be pursued Is shown by
4ivaa 80 h.,
There is such a thing as speculation In
lands or stocks being discouraged by banks.
but that is because their interests are like
ly to be affected, owing to the probable
1eeting of the prospect of realizing on the
security for the loans, due to an OVERRIDING
of speculation. In other words, it Is felt
that banks are organized for business. and
the attempt sometimes made to faSten upon
them the duty of guardian of the morals of
the community is hardly justified.
The first transaction in gas certifcat es
since they were listed on the local ex-
change was made today. Fifty of the $40
certificates of the par value of $1,000
brought $116ss. This security was quoted
on the basis Of each certificate being of
the value of 500 For each certificate at
the above figure the price paid was s23.12
There was but slight demand for gas
stock. which was satisfied with twenty two
shares at $50 per share. There was further
offering of this stock at the same figure
but none was taken
The same condition was manifested in re-
gard to Mergenthaler stock. A few shares
We're sold at 174 and 1874. and then there
seemed to be no further market.
Some shares of the Columbia Title In
surance Company found a purchaser at a.
per share. but no more were taken at the
same figure. although it was offered.
A customer appeared for Lanston stock
and 100 shares were taken at So per share
and upon another similar lot being offered
1t was also taken. apparently by the same
buyer.