The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1905-03-26
DEPRESSION IN
STOCK MARKET
Large Buying of Industrial Issues
Helped Matters.
CLOSING WAS IRREGULAR
REVIEW OF THE CONDITIONS OF
THE WEEK.

10 depression had to be contested III
today's stock market and this was
effected by the large buying or a few
individual stocks, notably Ontario 81
Western. which was rushed up in the
final dealings to So 3-S. This did not
prevent an irregular tone for the clos
ing Union Pacific was rather heavy
throughout. rising only d small fraction
over last night at any time and there
mad - sentimental influence on the
whole market. New York Central was
another strong feature and il WAS sup
posed to be associated with Ontario &
Western. \ number Of the industrials
made advances. LondonS disposition
to take profits was the main factor in
the heavy tone Of the first hours and
after this influence was overcome there
was another reaction due To aDprehen-
sion Of an unfaVOTdble bank statement
The SIS 600 coo loan contracted dis
closed by the statement helped to eff
feet such a reduction in deposits as to
relieve the reserve requirement to the
extent OF nearly SIS eco 600 SO that in
spite of the loss of cash Of $4,6lS,9O0,
which was considera bly, in excess of eX-
pectation, the margin Of the surplus
was expanded to the extent of 81. 325.-
$50. The events of the week afforded
ground for confidence that even with
further loan contra ctiOn by the banks,
resources will be found i'm the foreign
exchange market ana IN trust company
offerings To meet loan requirements.
1t is suggested that the present heavy
outward movement to foreign markets
of securities represents holdings acCu-
mulated in the early stage OF the mar
ket advance by foreigners and which
have been held since with the pro
ceedS of loans in this market The
loans are NOW being paid off and the
securities taken abroad to be held in
cheaper foreign markets. It is said by
authorities i'm the exchange market that
this process of delayed payment Oh
foreign purchases of securities is the
principal factor in the present sharp
downward tendency in the prices of
foreign exchanges. London discounts
hardened today and the sterling rate
declined at Berlin. Total sales OF
bonds, par vaIue), S2.550,000.
Free Liquidation.
Stocks have been freely liquidated dur
ing the past week and the decline in
prices. which was extended by the man
ipulatiVe efforts Of the bears caused
the uncovering Of stop loss orders and
forced offerings up on the market by
impairment of margins. The price lev
el WAS considerably lowered at times
but the haste with which the bears
covered their short contracts helped TO
restore a part of the losses. The re
action was regarded with cOmplaCenCy
as normal after the extent to which
these previous rises had run cOutinu-
ouSly and the shaking out Of weak aC-
counts, held for purely speculative pur-
poses. was left to add to the health and
SOUndneSs of the market. The recti-
Hcation of some of the excuses in the
price level. which had resulted from
the uubridled enthusiasm OF the spec
ulativC temper on the advance was ac-
CompliShed with SatiSfa ctiOn. A quiet
ing for stocks at this season OF the
year is according to precedent. owing
principally to the reasonable demands
on the New York money market for the
springs requirement of the interior
trade. Reserves which have been ac-
Cumulated 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 de
pOSits 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 shortage of funds on the stock
ugerket-
With the growth Of the interior mar
ket in prospect. however, there is a
natural disposition to anticipate the
situation which may, follow. There
have been large holdings of securities
influenced by the purely nominal rates
y
to day funds. the rate of return Of Sc
curiteS. low a s it has fallen at the high
level of market prices affording mar
gin of profit over the carrying charges.
The advance in the call loan rate from
two per cent or below to above three
per cent was sufficient To prompt the
closing out of some such accounts with
cut causing any fears OF what would
be called money strinEency.
The high level for stocks ruling which
offered "a handsome profit on such hold
1ngS as We're acquired i'm the early
stages of the advance will be an addi-
tiOnal incentive to convert the holdings
into cash. While the supplies i'm the
money market were not greatly re-
Stricted, lenders were less inclined TO
encourage borrowing for speculative
purposes and exercised somewhat
closer scrutiny for the collateral offered
for such loans. There can be little
doubt that this condition lay back OF
the reaction OF stocks.
Speculative Temper Shifted.
With the reaction in force. there
came also the natural shift in the spec
uiatiVe temper and i'm the mood with
w hlcn events were accounted. Opera
tors watching the market transactions
closely from hour to hour thought they
detected selling for account OF the
same parties Of capitalists whose pre-
NiOuS buying they had attributed to
accurate Information Of the coming
combinations. deals. dividend increases
and other similar factors which have
been potent 20 lift prices for a long
time past. The deniaiS and diSClaim-
erS of these rUmors which came out.
although having no greater color than
those which appeared during the pro-
SresS OF the excited buying. acquired
new credit with the selling i'm evidence
and prevailed on the market follow
cTS OF The movement to unload their
holdings 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 realty or the falsity
of the reports. long current of great
Arojects working out i'm the railroad
world That the stories stiu have vi
tality was clearly shown by their re-
newed Influence i'm rallyinE tho mar
ket after the liquidation had spent it's
force. Another effective factor i'm raj
lying the market was the course of
the foreign exchange market which
offered abundant evidence that recours@
was open To foreign money markets
to supply amy needs of our money mar
ket The large falling off in late
months in the trade balance i'm ou.
"a left this a