The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1904-01-04
LENT GaEAK
IN STOCK PRICES
Trouble Between Russia and ia
pan the ImpelIing Cause
GENERAL SLUMP FOLLOWED
other Considerations Seemed to be
Wholly Ignored and the Bank State
ment offered Nothing to
Stop Getting Out.
GENERAL SLUMP FOLLOWED

New York January 2.-Today's violent
break in prices of stocks was suddenly
and unexpected and the grounds for the
heavy liquidation for the day are not
clear even now although it is evident that
an acute apprehension Of the effects of
the coming outbreak of war between Rus
STA and Japan was the impelling cause.
The news of the day was rather more
hopeless of the possibility of averting
war; but Wall street has accepted war as
the assured outcome of the situation for
some time and has viewed that outcome
with apparent equanimity without selling
to discount war scare as is the invari-
able custom of speculative markets in
face of a coming event The culminative
force of the alarmed feeling today gave
rise to fears that something was known
in the interior centres of great capitalists
of complications threatening to involve
other powers in the coming struggle. The
published expressions of opinion of a
general involvement offered by an Ameri-
can military authority and limitations
that AN outbreak of war would involve
delicate situation for all the great war
seized upon to feed the prevalent alarm.
The effect upon the market lost nothing
in force from the fact mat considerable
speculative commitments have been made
in expectation of a January demand for
securities which may be checked by the
course of events which is feared.
Other considerations seemed to be Who'll
ly ignored and the bank statement offered
nothing to counterfeit the disposition to
oaf 0tff 0f str
is expected to involve large changes in
banking items, but todays $16000,000 loan
expansion following that of over $12,0OO,000
last week is indicative or other demands
than year end interest payments and
causes the fear that last winters enor-
nous corporations borrowings after Janu-
airy / are to be duplicated this year. The
market closed active and weak in spite
of spasmodic rallies in spots and losses
on the day range from 10 over points
on the particular active stocks.
The advance of the last few weeks in
prices Of stocks showed some hesitation
this week and came to halt when ad-
monished by the stiffening OF the rate
for call loans which gave warning of the
need impending for the use Of funds re-
Gently accumulated in banking reserves,
These funds have been placed on call
pending the demand for their employ
ment in paying the year-end obligations
for which they were accumulated.
The amount of the dividends and in
--terest to. be paid In January were vari-
ously estimated at from $13O,0O0,000 to
$3.50, 100000 by skillful arrangements, 1t
is possible to arrange for the transfer
of the greatest part of this by book
keeping accounts and by not disturbing
the aggregate bank deposits. But the
banks are accustomed to take account of
the possibility of simultaneous presen-
Of he
year-end payments and to arrange their
reserves accordingly. The further en-
gagements of gold in London for Inn
port this week have been viewed therefore
with satisfaction and have been a ma
terial factor in moderating the influence,
of the higher money rate. The course
of the loan item of the banks in the
next few weeks is another fact to be
l1eenly watched Large railroad bond
issues are known to be impending and
the present weeks heavy loan expansion
gave warning that the corporation bor-
rowing was beginning earlier than usual
without waiting for the actual release of
funds after the January disbursement.
Last year the loan contraction contained
up to the end of the year, but from De-
cember 25, 1902, to February 1, 1903, the
loans of the New York banks expanded
to the extent of nearly $75.00O 900, bring
Ing the total of that item to $3.50, 900, 900,
the high record. Much of that borrowing
was in the form of note issues by rail-
roads and bond issues are now offering
in the market for the purpose of taking
up some of the note issues into funded
forms. The possible further needs of the
railroads remain to be provided for. Ru-
mors have revived a set of combinations
and purchases amongst the railroads
which necessitate further capital issues
The only development in this direction
w
Alton preferred stock with a view to
its sale but this was sufficient to set
afioat a wide variety of surmises re-
garding a group of properties in which
the same ownership figures.
On the side of industrial corporations
the Journal of Commerce has compiled a
z statement of the total capitalization of
the completed Industrial consultations in
1903 of less than $3.50, 100000 compared with
81, 122,000. 5000 in 1902 and S2,S05000,0OO in
1901. While the Tightening of the money
market has checked the activity and the
advance in the market the reaction has
not become acute and the profit taking
by professional operators has been well
taken. The action of the market has fos.
tered the impression the powerful support
has been at hand to conserve the purposes
of advances The opinion is general that
an important element OF these purchases
is to improve the showing In Investments
held by great lnndnclal corporations In
yearly balance sheets, to stimulate the
market for taking new bond offerings to
better advantage and also to some extent
to make higher level of prices on which
to meet the demand of the public which
Is hoped for with the January relaxation
of the money markets The freedom from
anv pressure upon the market in face of
the advance has been an encouraging fac
ter In itself and sentiment over the busI-
ness outlook has grown less pessiG1istic
This is notably true regarding the iron
and steel outlook. Reports from railroad
traffic officials of a pressure of business
sufficient to threaten car shortage in
some directions were moi without effect on
sentiment also. The wild speculation in
the cotton market has zen disturbing
fictor rather than otherwise but this
has been resisted.
Factors in the background which have
not lost their force are the unsettling
influences of a national campaign, the
- ecision in the Northern Securities case
10 come and the shipping of consumptive
demand for products during the coming
year Opinion over the new years OUT
look is probably best summed up in the
words of one of the great mercantile
agencies.
with a Christening spirit coupled with
come doubt that the business community
awaits the Developments of 1904"
The bond market has reflected only
a light Investment demand and prices
have moved irregularly.
United States As registered have de-