The Birmingham age-herald., 1905-10-29

Operations in stocks have continued to be influenced by opinions over the money outlook. The stir of speculative inter est early in the week had It's origin al- most entirely in the supposition that au- tumn strain on the money markets had passed the worst, and that gradually re- turning ease was to be expected. There was no actual stiffening of money rates to accompany the later reaction in the stock market, but conditions pointed de- cidedly to recurrence of requirements that would tend to harden money again. The rise of prices of stocks was engineered by a party of professional operators and only slight outside interest was attracted at any point in its progress. The move ment was supposed to owe its success largely to the driving to cover of an ex- tended short interest, which ha dawaited a squeeze in money to find opportunity 10 cover their shorts at a profit.
 Seeing money rates working easier and prices of stocks advancing, they felt com- pelled to cover. With this requirement for stocks satisfied the market showed clear ly the lack of potential support from such an unsatisfied demand and the tone became soft The fact that the rise car ried the average of prices up to record and the strong partiality showed for many low-grade industrial stocks in the spec ulative movements, were grounds for caution and doubt The result was rather easy yielding of the market when the reactionary tendency was once estab- lished The feature in the money situation was the movement in the international ex- changes. The pressure on foreign money markets was of effect in carrying the sterling exchange rate here up to prac- tical level with the gold export point. At the same time there was recurrence of some of the interior demands on New York for currency. The low state of the surplus reserves of New York banks indicated a poor preparation for coin- cident demand upon cash reserves from foreign markets and from domestic sources. The threat of the necessity Of loan contraction was sufficient to prompt conservatism in borrowing for speculative purposes.
 The upgrowth of speculative confidence early in the week was materially aided by the views attributed to the president of the Imperial Bank of Germany that the money outlook had become satisfactory, and there was no likelihood of a further rise in the discount rate of that institu- ton. This was accepted as assurance Of the correction of the unsatisfactory spec ulative situation at Berlin, which had been a subject of complaint by the same authority at the time of the decision to advance the bank rate, and of the com pletion of arrangements for the Russian loan.
 In the New York money market the con tribution to bank reserves yielded by sub treasury operations was on diminish- ing scale owing to the subsistence of the mid-monthly tide of pension payments.
 Some part of the governments expendi- lures also was for foreign exchange for postoffice account and contributed to the strength of the foreign exchange market. Demand continued active also to cover maturing sterling lines
 The feversh speculative conditions de- veloped again in. the cotton market af- fected the supply of cotton bills in the foreign exchange market. New York ex- change at interior points turned again against New York and fell to discount at Chicago. Large engagements of vessel room for future exports of grain are pointed to as of promise for easing the foreign exchange situation. But railroads are overwhelmed with a flood of traffic offering, so traffic officials profess them selves unable to keep freight offerings in movement or to avoid congestion and freight blockades. Placing of unprece- dented orders for freight cars and rail- road equipments are reported in the effort to. relieve these conditions.
 The advance in the Norfolk and Western dividend rate was event of the week which proved to have been discounted. The passing of the dividend on American hides and leather preferred and the poor showing of earnings by the corn products company proved of more effect in the mar ket. Speculation has been active in the coalers. based on unconfirmed reports of plans for further consolidation of the an- thracite interest
 Bonds have been dull and irregular. United States 2s declined A per cent on call on the week.