The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1903-10-25
WEEK IN WALL STREET
SURPRISING RESISTANCE OFFERED
TO ADVERSE INFLUENCES.
Effect of Baltimore and Pittsburg
Failures on the Market-0utiook
for Monetary Conditions.

market was almost inert throughout. The
appearance of the bank statement caused
sluggish recovery from early depression,
but the movement was merely fractional
and was not maintained, the close being
irregular and still very dull. The reserve
item in the bank statement caused surprise,
the decline in cash reserves being reported
at only 5000, in face of an apparent out
ward movement of cash during the week
of between 5000. 600 and 100000. Bank off,
Gals were somewhat at loss TO explain
the discrepancy, but some of them assert
ed that there had been considerable re-
ceipts of currency from Chicago and the
West during the week, and the explana-
ton was hazarded that this movement
might have served to offset the heavy out
go to Baltimore and Pittsburg and the
tomary demand from the West for cur
rency at this season is the subject Of
much comment in banking circles, but that
there should have been SO considerable a
movement in the contrary direction in the
middle of October is unprecedented. 1t
was suggested as possible that local trust
companies had made transfers of cash de-
posts to the clearing house banks. Lon
don's uneasy feeling over the war outlook
in the far East had a slight effect in the
local market, and there was a repetition
of rumors in circulation for several days,
which have as often been denied of an in
stitution in trouble at st. Louis. There
was deposit of 100000 at the subtreasury
to-day for telegraphic transfer to st. Louis.
Inc variety OF the demand for bonds was
as conspicuous for several days, and
the number OF quotations on the tape for
bonds exceeded in number and variety
tnose 1or stocks for good deal of the
time. recession to 5S in United states
Steel preferred was the unsettling infiu-
ence at the close.
that the stock market has offered Surpris-
ingly good resistance to the developments
OF the week, which were undeniably seri-
GUS in their aspect. The appointment of
receivers for two trust companies in Balti-
more, although not wholly unexpected.
proved shock, and there was a severe
This was the more marked by reason of
considerable commitments to the long side
made by professional traders during the
latter part of last week, which were hur-
riedly thrown back on the market on Mon
day. But Tuesday saw hasty repurchase
Of holdings, and the bank failures at Pitts
burg were practically ignored in the trad
ing. The conclusion seemed to be obvious
that the liquidation growing out of the
Pittsburg and Baltimore troubles had been
proceeding with that which has been in
progress at the Stock Exchange for
months.
With the prospects of lower rates for
money, the rate of return on many railroad
bonds at present prices has made them at.
tractive for investment. In the case OF
shares of stock. 1t cannot be said that the
present situation has extended beyond
marked cessation of the recent persistent
pressure to hquidate. There is no longer
manifest the constant selling on all news
that might be regarded as favorable, which
gave evidence for so long of the urgent
needs of large holders of securities for ready
funds The weeks events in the stock mar
ket offer some indication of contrary ten
dency to buy stocks on bad news. This is
largely due to demand from an uncovered
professional short interest and has not been
impressive as an investment demand.
The failures at Baltimore and Pittsburg
have not parted, however, to arouse an UNI
easy feeling over the possible consequences.
The growth of trust companies has been one
of the notable features of the recent era
Of prosperity. The enormous consultations
Of capital for the last few years and the
final operations connected with them have
expanded the field of operations for these in
situations even along the lines of their orig
inal operations. But besides this their opera
tions have been widely extended into the
banking field by the increase Of demand
deposits for which liberal interest is often
paid, while the legal requirements on banks
for reserves do not apply to these institu-
tons. Another field of operations for the
trust companies, which has been much crit
icised, has been the promotion and explOita-
ton of enterprises by underwriting. The tone
of the discussion at the bankers confer
ence at San Francisco is sufficient evidence
of the frank recognition of abuses in this
field among bank and trust company Of
ficials themselves. The controversy between
the New York clearing house and the New
York Trust Company over the question Of
the maintenance of trust company reserves
brought the question to the public view
long ago. There have been episodes in New
York financial circles that have illustrated
the abuse the promotion side. including
the ship building case in the pub
lie eye. The Baltimore sample of
the consequence of over-commitments by
trust companies in promotion of projects
therefore caused keen impression i'm the
financial world, owing to the doubt of how
far similar state of affairs might be
extended in the trust company situation as
a whole. The Pittsburg incident was also
examined in it's illustrative aspects. The
enormous accretion of wealth in Pittsburg
of late years, growing out of the CONSOLE
dation process in the iron and steel indus
try. is notorious In the financial world. The
large extent to which this new wealth has
gone into bank extension is also generally
recognized The terms on which deposits
may have been attracted to new banking
institutions is brought forward for consd-
GRAFTON by the failure of the Pittsburg