New-York tribune., 1905-07-31
THE FINANCIAL MARKETS.
for Money Higher Tending Earnings
THE WEEK IN WALL STREET.

OF higher prices. There nothing In tne
weeks news upon which bear campaign couio
be based. Developments in the business woriu
were extremely favorable. as. for instance. IN
the of the iron and steel trade. which p'e
| sented unusual progress for this period of the
year, reports from authoritative sources indi-
eating an increasing demand for consumption
and a better outlook for the fall and winter
than ever before recorded in the history or the
business. The quarterly report of the United
States Steel Corporation. showing net earnings
Of SO.3O00OO. naturally serves TO create con-
f1dence in the general business situation. mas
| much the iron and steel Industry is con-
sidered the barometer Of trade. The connpany's
heavy appropriations out OF surplus for cepre-
ciation betterments and new construction ex-
cited favorable comment In Wall Street. as in
the lean quarters of last year these funds had
| received little replenishment. The amount Of
| untitled orders hand on June 80, too. although
several hundred thousand tons less than three
| months previously, the largest on any June
| 30 since the Steel Corporation began operations.
| And the Street. in considering these figures. did
| not overlook the fact that since the first Of this
month the steel industry has taken on new life,
the orders from railroads In the last ten days for
| steel rails for example having aggregated fully
| 100000 tons. of which orders 1t is a fair as
sumption the United States Stee! Corporation
| has received large share.
| The action Of the Erie directors in placing the
second preferred stock on per cent dividend
| basis has received adverse criticism in
| quarters. the ground that the company's fiscal
| requirements for improvements and betterments
are heavy and will continue to be heavy for a.
long time to come that the money be paid out in
dividends the second preferred stock should be
retained for the property's physical needs. Doubt
| less the directors fully weighed the arguments
| for and against dividend declaration before
taking final action. and doubtless they decided to
| place the stock in the dividend class the
| theory that the large increase in the company's
business and the splendid prospects for the road
warranted payment to the holders OF the
ond preferred stock especially these investors
had been waiting patiently for many years for
a return their holdings. The Erie will be-
unless all signs fall a wonderfully profitable
| property before many years. and the first pre-
| ferred stock, which IS a permanent per
| cent investment. ought. therefore to appeal to
| careful market followers. Erie common, it is be-
| leved in many we'll informed quarters, will some
| day sell as high Reading common. especially
| as the Erie company is big trunk line road
| while the Reading must depend in great part on
| the anthracite coal trade for its profits. The
anthracite coal situation at the moment is most
prosperous but there are mutterings of discon-
|
| between the men and the employers. which
| drawn up when the last big strike was settled
! terminates next spring. it may to pass
that once again the hard coal trade will be
| quilted in another great labor In most
| lines of work everything is serene at the mo-
ment, but it may be well for operators in stocks
| to take look ahead. In the greater number OF
cases securities are selling for all that they are
worth intrinsically, and while they doubtless
| will move higher under the influence of the
| powers in Wall Street, who anxious to part
/ with their speculative holdings. there must. OF
| course. be limit TO the upward movement. 1t
| is thought by many careful observers that, de-
| spite the favorable position of business in the
United States and the outlook for record crops
| there will be enough change in the money mar
| ket in the fall TO bring about period of de-
clining values the Stock Exchange. It is not
| believed. however, that the stock market will
run into period of panic. If stocks decline in
the fall, they doubtless will recover their losses
| in the new year, assuming that general condi-
| tions continue favorable
Efforts are now being made to draw cash to
| the financial centres in preparation for the
! heavy demands that will materialize thirty days
| hence for money to move the crops Results
| so far have not been especially successful, not
| withstanding that unusual means have been en-
| ployed. for the disposition to maintain a tight
| grip funds is widespread ever. Owing
/ to the large extent to which borrowers have
| utilized foreign exchange, money remains rela-
lively easy. Before long. however, lending rates
must stiffen and in anticipation of that devel-
| opment the demand for time money is increas-
ing. At the moment there is rather wide diff
| ference between call and time money rates, but
| It will disappear in the course of the next few
| months, unless there should be some remark
able change in the conditions governing the
movement of funds. Naturally there will be
construction in money while the movement Of
| the crops is at it's height from the middle
| latter part OF August to the forepart of Novem-
| Der. After the inquiry for funds in connection
with the crops ends there will be the payment on
| the recent Japanese loan subscriptions in the
United States: also presumably the payment of
| the balance still retained here the subscrip-
tion to the preceding Japanese bond issue. Then
| 1t should be borne in mind that in the readjust-
| ment of the Russian finances. incident TO the
settlement of the war in the Far East there
will be a large Paris demand on this country for
gold. The considerations named do not warrant
uneasiness the part OF American investors
but they do deserve attention from operators in
stocks who believe that prices for securities will
| continue to advance in the face Of adverse
money market conditions.
1t can hardly be otherwise than that money
Will be more active than at present in the
| of a few weeks and throughout the last months
of the year. Offerings Of commercial paper
still surprisingly small. reason for which may
be found in the good collections reported by
| the merchants Borrowers have turned quite
extensively TO the foreign exchange market for
accommodation, owing to the limited cash hold
ipuyc Of tha han kS in Spfra