The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1904-01-03
VIOLENT BREAK
IN STOCK PRICES
Trouble Between Russia and ia
pan the lmpelling Cause
GENERAL SLUMP FOLLOWED
. Other Considerations Seemed to be
Wholly Ignored and the Bank State
ment offered Nothing to
Stop Getting Out.

and unexpected and the grounds for the
heavy liquidation for the day are not
clear even now although 1t 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 a war scare as is the invari-
able custom of speculative markets in
face of a coming event. The culminatiye
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 intimations
that an outbreak Of war would involve
delicate situation for all the great war
powers including the United States were
seized upon to feed the prevalent alarm.
The effect upon the market lost nothing
in force from the fact that 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
get out of stocks. The first of the year
faa 1arU ph n
banking items, but ,todays sl6,0O0,OO0 loan
expansion following that of over $12,000.000
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 TO 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 a halt when adj
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 $3.50, 100000 to
;150,OOO000 by skillful managements. 1t
s possible to arrange for the transfer
Of the greatest part of this by book
keeping accounts and by not disturbing
he aggregate bank deposits. But the
banks are accustomed to take account of
he possibility of simultaneous presen-
.ation of the checks sent out for these
year-end payments and to arrange their
reserves accordingly. The further en-
gagements of gold in London for i'm
port this week have been viewed therefore
with satisfaction and have been ma
terial factor in moderating the influence
of the higher money rate. The course
of the loar item of the banks in the
next few weeks is another fact to be
keenly 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 Is, 1902, to February /, 1908, the
loans of the New York banks expanded
to the extent of nearly $4,000, 600, 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
Il -. ~ (tf-s
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 mas compiled a.
statement of the total capitalization of
the completed Industrial consultations in
1903 of less than $3.50 100000 compared with
s1,122,000. 5000 in 1902, ana s2,S05,O0O,OOO 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 or these purchases
is to improve the showing IN Investments
held by great fnanciai corporations in
yearly balance sheets, to stimulate the
market for taking new bond offerings to
better advantage and also to some extent
to make a 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
any pressure upon the market in face of
the advance has been an encouraging fac
tor in itself and sentiment over the busi-
ness outlook has grown less pessimistic.
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 not without effect on
sentiment also. The wild speculation in
the cotton market has teen a disturbing
factor rather than otherwise but this
has been resisted.
Factors in the background which have
not lost their force are the unsettling
decision in the Northern Securities case
to come and the shipping Of consumptive
demand for products daring 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
some 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-
ciined a: the IS Il and the old As per