Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-03-26


large buying of a few individual STOCKS
notably Ontario and Western, which was
rushed up in the final dealings to 63%. Ihis
did not prevent an irregular tone for the
closing Union Pacific was rather heavy
throughout, rising only small traction
over last night at any time and this had a
sentimental influence on the whole market.
New York Central was another strong
feature. and ii supposed to be asso-
ciated with Ontario and Western. A num-
Der of the industrials made advances. Lon
don's disposition to take profits was the
main factor in the heavy tone of the frs
hour and after this influence overcome
there was another reaction due to appre-
hension of an unfavorable bank statement.
The SlS,o00,O00 loan contraction disclosed
by the statement helped to effect such a
reduction in deposits as to relieve the re-
serve requirement to the extent of nearly
$4,000 600 so that, in spite of the loss in
cash of S461S,Go0. which was considerably
in excess of expectation, the margin of
the surplus was expanded to the extent of
S1325, 100.
Ground for Confidence.
The events of the week afford ground for
confidence that, even with a further loan
contraction by the banks, resources will be
found in the foreign exchange market and
in trust company offerings to meet loan
quirements. 1t is suggested that the pres
ent heavy outward movement to foreign
markets of securities represents holdings
accumulated in the early stage of the mar
ket advance by foreigners and which have
been held since with the proceeds of loans
In this market
These loans are now being paid off and
the securities taken abroad to be held in
cheaper foreign markets
1t is said by authorities in the exchange
market that this process of delayed pay
ment on foreign purchases of securities is
the principal factor in the present sharp
downward tendency in the price of foreign
exchange. London discounts hardened to-
day and the sterling rate declined at Ber-
lin.
Total sales of bonds, par value, were
s., so, GOO.
Stocks Freely Liquidated.
Stocks have been freely liquidated dur
ing the past week and the decline in prices
which was extended by the manipulative
efforts of the bears, caused the uncovering
of stop loss orders and forced offerings
upon the market by impairment of margins.
The price level was considerably lowered at
times, but the haste with which the bears
covered their short contracts helped to re-
store part of the losses.
The reaction was regarded with compla-
cence as normal after the extent to which
the previous rise had run continuously. and
the shaking out OF WtIk ACCOUNTS, Delu lOI
purely speculative purposes, was felt TO
add to the health and soundness of the
market. The rectification of some of the
excuses in the price level which had re-
suited from the unbridled enthusiasm of
the speculative temper on the advance was
accepted with satisfaction.
A quoting of the market for stocks at
this season of the year is according to
precedent, owing principally to the sea-
sonable demands upon the New York
money market for the spring requirements !
of the interior trade.
Reserves Sure to Be Reduced.
Reserves which have been accumulated in
New York banks and which have been
placed on call for use in the stock market
to avoid keeping them idle and Improbable
in bank deposits are sure to be reduced
and placed in active use in the currents OF
trade. The beginning of this demand has
been plainly felt during the week, but it is
not yet sufficient to cause any actual snort
age of funds in the stock market.
With the growth of the interior movement |
In prospect however, there is a natural
disposition to anticipate the situation Whlch
may follow. There have been large hold-
irps of securities induced by the merely
nominal rates of interest which have ruled
for day-to-day funds, the rate of return on
securities low as it has fallen at the high
level of market prices, affordlng margin
of profit over the carrying charges.
The advance in the call loan rate from Z
per cent or below to above per cent was
sufficient to prompt the closing out OF some
such accounts, without causing any ieaIs
of what would be called money str1ngency.
The high level of prices for stocks ruling,
which offered a handsome proht on such
holdings as were acquired in the carry
stages of the advance was an addltlofial
incentive to convert these holdings into
cash.
Borrowing for Speculation.
I-nf
were not greatly restricted, leaders were
less inclined to encourage borrowing for
speculative purposes and exercised a some
what closer scrutiny of the collateral offer
ed for such loans There can be little doubt
that this condition lay back of the reaction
in stocks. With the reaction in force there
came also the natural shift In the specu-
lative temper and in the mood with which
events were accepted. There was Htue
change in the events themselves.
Operators watching market transactions
closely from hour to hour thought they de-
tected selling for account of the same
parties of capitalists whose previous buy
ing they had attributed to accurate infor- |
nation of the coming combinations, deals,
dividend increases and other similar fac
tors which have been potent to lift prices
for a long time past.
The denials and disclaimers of these ru-
mors which came out, although having no
greater color than those which appeared
during the progress of the excited buying,
acquired new credit with the selling in evil
dence and prevailed on the market follow
ers of the movement to unload their hold
ings.
Railroad Reports.
There was large element whose selling
during the week was no better informed
than their buying had been, and the action
of the market threw little additional light
on the question of the reality or the falsity
of the reports long current OF great projects
working out in the railroad world. That
the stories still have vitality was clearly
shown by their renewed influence in rally
ing the market after the liquidation had
spent its force.
Another effective factor in rallying the
market was the course of the foreign ex-
change market, which offered abundant
evidence that recourse was open to foreign
money markets to supply any needs of our
money market The large falling off in
late months In the trade balance in our ,
favor had left this open to some question.
But II IS now evident that the unusually
heavy reserves of foreign money markets
will yield supplies to New York upon de-
mand.
The growth of belief in a coming peace
adds to the relaxing tendency of foreign
markets. News OF the week has included
the placing of large blocks of new bond is
=. 90.