The sun. [volume] (New York [N.Y.]) 1833-1916, 1903-05-24
LONDON MARKET Is FIRMER.
pEDLCTTON IN THE DISCOUNT
RATE A BENEFIT.
MARKED Recovery In American Railway
shares--Prices Above Those in New
york-Iny estOvs SIN Take Gloomy
View OF the south African situation.
.sp,cidi cable Despatch TO THE Sun

,Sptcdi Gable Despatch TO THE SUN.
LONDON May 23.--The reduction Of the
Rank of Engand's official rate Of discount
from to 3i3 per cent. has already helped
the stock markets, which now have frmer
tone than for many months The Bank
s,ill holds coin bullion OF over E35. SOC. 900,
which is f5oO. 900 more than year ago, when
the 3 per cent. rate was operative, so that
tho position is still very strong. The high
rste has been almost wholly due to recent
largo loan issues, which as yet have not
,ound their way into hands that are strong
enough to hold them. with the result OF MAX
ing il necessary to finance the weak specu-
ator. This state Of things had burdened
the trade of the country with a per cent
hank rate since October. This was really a
S per cent rate. for the banks throughout
the country charge 1 per cent. above the
official minimum rate Of discount. The re-
duction of the rate promises much needed
.hmuius to internal trade, which Is none too
furnishing
The International monetary condition
entirely justified the action Of the
Rank in reducing the rate Of interest
.l the first place American exchange Is
q, point which admits Of gold shipments
to Paris Secondly. large purchases Of
British securities for French investors
have lifted the French rates of exchange
considerably above the point at which
it would pay to take gold from London
Tor Paris. Thirdly, German exchange
is much above the figure at which gold
shipments to that country would be profit
abb. The directors Of the Bank. therefore,
had NO difficulty In reaching the conclusion
that there was no danger of gold exports,
,tp caIy as the open market Ia still con-
I'D, rably indebted to the central institution,
in respect to the TransvGa al loan Is to be re-
turned to the applicants.
The principal feature at present In the
situation is the marked recovery in Ameri-
can railway shares The tone here Is
very firm. Buying orders Of most OF the
leading shares have put prices well above
New York parity. the rise in some instances
being very substantial. In foreign rail-
way securities there has been a slight i'm
provement in few Of the Argentine de-
scrptiou.
The average British investor persists in
taking an unfavorable view Of the situation
in South Africa. Even the Transvaa loan
has declined fractionally every day since
its issue. while the panicky feeling in the
mining market has been intensified by .
series OF speculative failures at Johannes
burg. There have been continued sales OF
Rand shares from Paris, which hitherto
has been good friend to the kaffr market.
the motive apparently being the possession
of adverse news on the labor question.
Despite the hopes that have been enter
tanned in some quarters the revival In the
copper market hts not mEteriflized. The
demand from home manufacturers Is ex-
tremsly conservative. The position in the
United States is regarded Gs a strong one,
but the nervousness which hes Character.
lied the recent developments in Wall Street
las doubtless restricted the speculative
interest.