New-York tribune., 1905-07-24
THE WEEK IN WALL STREET.


market was light in volume. prices maintained
strong throughout the greater part Of the six
days of business. reaching in Wednesdays deal
ngs the highest level since the elimination of the
bull movement earlier in the year. Indeed. the
leading issues recorded an average price Of only
a few points under the high figures OF the year
made last March, although losing some of the
gain before the close. The chief active securi-
ties selling far above the low figures re-
corded in May, and, according TO the opinion OF
the best market judges. further gains will be
made before any material setback develops. the
idea of higher quotations being based on the
technical strength OF speculation and the gen.
orally favorable position OF the factors govern
ing the actual worth OF investment properties.
A boom is not looked for. but a gradual apprecia-
ton in values is expected. Stocks undoubtedly
are in good hands. although in the last few
weeks there has been certain amount OF dis
tribution under way, and it hardly appears likely
that the larger interests will sell the balance OF
their holdings at present prices. as they ap-
parently convinced that the tendency for
time to will be in the direction Of
Improvement, especially in the leading issues.
1t is easy enough TO find stocks that are selling
for much more than they are worth in
trinsically. but this fact does not preclude the
movements generally to extremes. In the
present case, while prices not cheap in the
majority Of shares there are so many induce
ments TO maintain tight grip on ones holdings
and many reasons for the development Of
speculative appetite the part of the so-caled
public that IT is difficult to offer any encourage
ment for the advocates of lower figures for the
present at least. In the fall, when money grows
dearer, doubtless there will be opportunities for
successful operations the short side of this
market
Conditions have been favorable for health
full growth Of the various crops. and unless
period OF drouth should develop the years har-
vests will show most profitable results. except
in the OF cotton which. from present in
dications will be a short crop. The advance.
however IN the price ot the product may offset
financially the loss in yield. Trade conditions
IN general are encouraging. The iron and steel
industry shows signs OF improvement in all
lines. railroad earnings are heavy in all parts
OF the country. bank clearings are large. and
the position OF labor regarding employer and
employe is unusually favorable. The fact that
lending rates doubtless will be higher in the
autumn does not worry the Street at the mo-
nent but it is more than probable that the
more important market interests expect to sell
their securities at higher prices before the fall
attracting buying by many careful operators.
Union Pacific was added in the week to the list
of increased dividend payers, but the action OF
the directors had been discounted by the re-
cent rise in the price OF the shares, although II
was thought that the quotation for the issue
would move higher later on in the season. AS
r par cent security Union Pacific is selling at
fair price for an investment OF its character.
while Baltimore and Ohio. which also recently
entered the per cent column may be consid-
cred cheap at its present price, which is num-
Der Of points under that Of the Union Pacific.
Amalgamated Copper also placed on a
higher dividend basis in the week. but the stock
failed TO make any noteworthy Improvement
The tendency toward higher dividends on tho
part of many of the leading securities naturally
is a strong argument in favor Of better prices
for stocks and, Of course, 1t will serve TO IN
crease the confidence Of the investor in the
stability and strength Of the American invest
ment situation.
BY the decline in discounts in Europe the for
eign exchange houses in the United States are
enabled TO issue their so-called finance bills
practically without limit. These bills are the
representatives. of foreign capital. and make up
for the shortage in the domestic supply Of
money II is difficult to realize that there is a
deficiency in money in the United States when
the Treasury statistics show larger amount OF
cash in circulation than last year, when there
was a plethora Of funds. The explanation is
found, Of course, in the great expansion OF loans
which has reduced the bank reserves for the
country as q whole to unusually low point
for this season of the year. Rates for money
for various periods in Europe are about IL per
cent below the prevailing quotations in the
United States so that there is an ample margin
Of profit for the exchange houses in their opera
tions in finance bills. In effect the exchange
houses borrow in Europe and lend here. These
concerns borrow by drawing their credit in
Europe, and they pay interest at the ruling
rates abroad the amount Of credit they util-
ize. On the other hand they lend at the higher
rates prevailing in the United States. and the
difference In rates constitutes their gain. They
may derive a further benefit from the acqusi-
ton of cheap commercial bills for use in cover
ing or offsetting their finance bills. The
change houses are ready either TO lend the bills
or to sell the bills and lend the money received
for them. There would appear 10 be an advan-
tage 10 borrowers at present in taking the bills
and disposing OF them for the needed cash
Most Of the finance bills run for sixty ninety
days, and the prospect is that before maturity
they can be covered with cotton or grain bills
picked UP at bargain prices. AS Is generally
understood when finance bills are procured they
must. when they become due be replaced with
demand bills else discharged with cash at
the existing rate for demand bills When the
exchange houses sell their finance bills and lend
the money. borrowers are not involved at all In
exchange transactions In other words, when
cash IS obtained borrowers pay interest TO the
exchange houses the same as they would 10 the
banks which had accommodated them with
money.
1t is likely that money viii remain easy in
Europe for several weeks to come, and while