Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-09-10
FINANCE AND TRADE IN
MARKETS OF THE WORLD

NEW YORK, September 9.-The restored
confidence over the money market. which
caused the rally In stocks yesterday. was
somewhat impaired again when trading IN
stocks was resumed today. An active bear
party put out short lines freely In various
quarters of The market. There was some
covering from this source after the bank
statement appeared but prices eased on
again before the closing. as the radical
changes in the various items of the bank
statement were not liked. in spite OF the
small impairment of the surplus, which was
made to show as a net result Inc oahk
statement, in fact, showed a much heavier
loss of cash than the most liberal estimates
and the preliminary computations. The
highest of these had run to Ss,5o0oO0, while
the decrease shown by the bank statement
runs to nearly s11 100000. In order to effect
the necessary reduction in the deposit item
to keep pace with this heavy loss of cash
and conserve the surplus the clearing
house banks had marked down the average
of the loan item for the week of not less
than $50 2}T. 900. The decline in deposits
thus affected amounts for the week to
s41, 165 100. These changes are far in excess
of the reductions made in any previous
week in the history of the clearing house,
and are the more notable as they include
opera tons for only five banking days. The
largest previous loan reduction for a week
was of less than S25oo0,o00, and this oc-
CURED for the week following the stock ex-
change panic In May, 1901. The large re-
duction in reserve requirements caused by
the cutting down of deposits restricted the
mroad upon the surplus to S66i 90. as com
pared with last week That item now
stands at 81 S31 $50, which is the lowest
figure II has touched since November, 1903.
No one supposes that there has been any
such drastic contraction of credits during
the past week the reduction of loans by
the banks would indicate. The liquidation
In the stock market has been moderate
compared with previous periods OF active
liquidation, and the fluctuations In the
money rate have indicated no such urgency
as would be caused by such a withdrawal
of credits.
The effect of this was aggravated by the
sensa tional fulmnations against the market
from professional quarters in which some
prestige has been built up by the success or
previous attacks.
There seems to be no other important ex-
ception to the favorable tenor of news from
all quarters of the industrial and CONNER
cial world. The railroad situation is de-
scribed by traffic officials in superlatives.
The volume of merchandise tonnage Is pro-
nounced unparalleled. and the movement or
grain to market, with the heaviest volume
yet to come, is taxing the equipment re-
sources of the railroads and leading to COM
plants of car shortage and to apprehension
of coming congestion and forced embar-
goes Oh some Glasses Oh lTelSHt ne CA
istence of yellow fever in the south causes
some interruption to traffic in that region
alone. News from the crops has continued
highly favorable, even the cotton crop yield
ing a favorable influence by the unexpect-
eddy small decline in condition revealed by
the governments August report. The corn
crop Is tending toward the largest yield in
the history of the country. The steel trade
Is enlivened by the active demand for all
grades of product. extending in the case OF
steel rails and other material used In rail-
road equipment into engagements for next
years deliveries. The volume of bank clear
ings for August has risen to total never
before equaled for that month, and while
the increase in New York is proportionately
much greater than in the country at large
outside of New York the exchanges show
an Increase of 165 over August of 1904
With this substantial basis for values in
evidence, brake is afforded upon the down.
ward course of prices.
The principal selling of stocks evidently
comes from those who are holding with bor-
rowcd money which is recalled by the lend
ers for other necessities or to make pro-
vision for an outlook which clearly threat
ems the need for further contraction of
credits. The seasonable demand for funds
from interior sources is proving large as
every one foresaw would be the case, in
view of the large crops to be moved and
the great business activity prevailing in all
parts of the country. The small proportion
of the surplus reserve of New York banks
revealed by recent bank statements clearly
pointed 10 tne necessity Tor sealing down
deposits by reduction of loans to keep
pace with the Withdrawals of cash from
New York, in order to keep within the
limits of the legal reserve. AS 1t happens,
the subtreasury is also absorbing add ton
al sums from the banks. the activity of
business has extended to imports and GUS
toms payments are consequently large. The
banking situation thus far is developing
along normal lines. But on the side of the
foreign exchanges greater uncertainty ex-
lists, owing principally 10 the question of
the amount of the demand for credits
which will be made by the newly pacified
powers The belief that Russia's relief
from an indemnity obligation would restrict
its borrowings has given way to the sup
position that a large Russian loan is to be
forthcoming. The continued accumulation
of gold at Paris is the warrant for this sup
position This has induced rise in the Of
flcial discount rate of the Bank of England
and the expectation that the Imperial Bank
of Germany will follow with similar ac-
ton.
In the stock market attention Is keenly
directed toward discerning the point where
liquidation will sufficiently provide for the
needs of the money market this develop
ment being expected TO mark the influx
of a demand which waits for opportunities
to absorb securities at an advantage.
Bonds have been affected by the efforts
to iquidate securities, but in much less
degree than stocks
United States 2s advanced one-eIghth
the 3s and old As one-quarter and the
new Is three-fourths per cent on call on
the week.