The Birmingham age-herald., 1903-03-09
NATURALIZATION
 IN STOCK MARKET
Surplus Reserve of Clearing
 House Banks Wiped Out
LOSS CAUSED BY DECLINE
Some Futile Efforts Were Made to Check the Decline By Supporting Orders, But These Proved Too
 FIimsy for the Purpose.

New York. March 1.-The stock market was thrown into a condition or demoral- ization today by the disclosure or the fact that the surplus reserve or the clear ing house banks was practically wiped out. Excluding government deposits, this Item is now $666,s ,s75, compared with sS,- e5S 455 at this time last year, and Slo11,- 27b two years ago. The severe loss in cash reserves was about as much above the preliminary estimates as last week s loss was below it, thus disclosing the reetifieation by the average system of computation of last weeks discrepancy.
 The $10oOO,OO0 loan contraction fulfilled the expectations of stock market exports that liquidation of the week and the shift ing of loans to foreign money markets would be reflected in that item, but the loan contraction must have been nearly $40 100000 to keep pace with the rate of depletion of cash reserves. No reader of the bank statement can be left in doubt that further calling of loans would have to be resorted to by the banks next week and operators threw over stocks in all directions to prepare for this emergency. Some futile efforts were made to check the decline by supporting orders. but these proved too fiimsy for the purpose and prices broke through violently to the lowest of the week. Prices were crumbling dangerously when the mar ket closed at about the lowest, and on very active dealings Fierce raiding tactics by the bears were a factor in the slump.
 The speculative contest in Union Paci- .hc was made evident by the extreme
 ff, Paul, Canadian Pacific, Manhattan, New York Central and St. Louis and San Fran cisco ran from to 3ss. The bank state ment appeared to be the sole factor in the market and before it's appearance the trading was languid and sluggish.
 The indications of large selling orders served to shake this confidence and awaken the fear that the market would have to face a skilful and hostile cam paign directed towards forcing prices to a lower level The declining reserves of banks and the loan contraction which re- suited were the determining factors in the situation. But up to this week. this factor has not been largely effective in shaking the confidence of q large specu- lative party in spring advance in prices. Selling has been grudgingly done and only when forced by restriction of credit faell- ities.
 Sentiment this week has changed and has become bearish as shown by the ready attention given to all unfavorable developments and the entire lack of con alteration given to anything of a kind promising all for values. Great disap- pointment was caused by the showing of net earnings by such railroads as re- ported during the week for January The December showing had been better than that for November, and the fact that many advances in freight rates had be- In 1of lsaH fn hn hope that the inroadss upon net earnings, due to increased operating expenses, would be corrected during January. Ow ing to freight congestion, storm block ades and the high prices of coal for fuel. the January returns show that in- creased gross earnings of railroads are generally almost wiped out by added ex- penses.
 There has been a recurrence of uneasi- ness over the labor outlook, due to the dispute between the Wabash and it's em- ployes There is dread that the dispute may spread and involve other systems. The judicial injunction issued against the labor union has come under interested discussion on account of it's far-reachinE scope and the outcome of the legal dis pute is awaited with lively interest. The slump in cotton was not without its ef- feet upon stocks, owing to the liquidation for the purpose of protecting interests in the cotton market. The money situation from day to day was reflected in the ad- vanced interest rates With surplus re- serves of the banks last Saturday at the lowest figure for dozen years. with loans practically at the highest record figures for the New York associated banks with the sub-treasury withdraw ing nearly a million a day from the money market, and with interior ex- changes holding against New York, it is not surprising that loan contraction by the banks has been followed and that money rates have run up, notwithstand- ing resort to foreign money markets for very large loans No accurate estimate of this foreign borrowing can be made but the break in foreign exchange and the rise in interest rates at Paris and Berlin with the necessity for the Bank of England to retain its per cent mini mum discount rate to protect the London market, are all unmistakable indications that 1t has been large.
 Bonds have suffered in common with stocks in the weeks selling movement. United States 2s coupon and 3s coupon advanced A and the 2s regular declined X per cent, as compared with the clos ing call of last week.