New-York tribune., 1905-07-17
THE FINANCIAL MARKETS.
STOCK VALUES NEAR BEST PRICES OF THE YEAR.
Prospects for Further improvement Conditions Railroad
Earnings.
THE WEEK IN WALL STREET.


In last weeks stock market the leading active
railway shares reached level that averaged at
the high point 125.17, as compared with the low
point of May OF about ia while the leading in
dustrial securities showed improvement nearly
as great At the high level recorded at the
elimination of the bull movement earlier in the
year the average for the chief railroad stocks
was 127.42 it will be seen that a rule
prices at present not far from the best OF the
year, recoveries from the spring decline having
been made in great part in the last four weeks.
According TO the talk one hears in the best
quarters of the Street no material setback in
quotations is expected at the moment while 1t
is believed that before the fall season, when
there doubtless will be higher money rates,
values Will move to a range well above the cur
rent one despite the fact that IN many cases
stocks are selling for all that they are worth In
trinsically The idea that further improvement
will be brought about is based on the relative
ease in money. on the splendid outlook for the
crops. on the generally sound condition OF busi-
ness throughout the United States and on the
apparent determination Of the larger holders OF
securities to distribute their stocks and bonds.
The last named reason is one OF the best for the
speculative mind to consider The big men have
a large supply of securities which they have
been carrying in most cases on big bank loans.
and they recognize the wisdom Of reducing their
commitments before the autumn. AS conse-
quence, they intend to take advantage of the
current favorable opportunity to advance prices,
as they have been doing in the last few weeks,
and they have the influence OF the great bank
ing power Of New-York behind them 1t readily
may be seen how favorable the chances are for
the success Of their plans
Already a considerable amount OF stock has
been disposed of, as reflected in the increase
In +ba
called public the aggregate thus being carried
being larger than at any time since last March.
Stocks have been easily disposed of advanc-
ing values, and unless there should be
radical change in the general situation there
Will be no reason to suppose that the public
appetite for good securities will not expand.
That there is still a large amount of investment
capital in the country ready for use is indi-
Gated by the large subscriptions to the Japanese
loan which put out last week, and that the
country is well supplied with money for the
development Of commercial enterprises is made
evident by the constantly increasing activity in
all lines of business. Factors governing the
actual worth of securities are extremely prom
isiEg. Railroad earnings are growing despite
the fact that the summer is supposed to be a
dull time in trade, bank clearings are larger
than ever before, the recent lul in the iron and
steel industry has been followed by a better
demand for consumption and. best of all, the
condition of the crops foreshadows a record
breaking harvest for all cereals. The bright
outlook for peace in the Far East is another
factor Of prime Importance to the securities
markets of the world. Considerations based on
outside conditions and on the technical position
OF the stock market naturally do not encourage
pessimism at present in Wall Street but of
course, it should be borne in mind that no mat
| ter how favorable conditions may be- stock
market values cannot move in direction in
definitely, and many good judges of market
| movements believe that the minute call money
rates begin to move in the direction of higher
quotations there will be a material reaction in
values the Stock Exchange
A change Of some importance has been
wrought in the foreign exchange market situa-
ton by relaxation in money in Europe There
! are two reasons for recurrence of ease in
money abroad. The first reason is the release of
funds that were accumulated for the so-called
July 1 window dressing or in other words ex
hibit of condition by the banks, and coincidentIy
| for the heavy midyear disbursements The
second reason, and the more important of the
two all things considered is that there is to be
a iurther delay in the readjustment of Russian
| finances. According to information received by
cable, there will be attempt to float a Russian
| loan until peace terms between Russia and
| Japan have been definitely agreed upon and
| ratified. Presumably, therefore, not before Oc-
| tober will there be emission of Russian
| bonds Before that time. indeed. circumstances
would not be propitious for the placing of Rus
| sian securities At this particular juncture
Japan is putting forth bonds, and there soon will
! follow, on both sides of the Atlantic a large
| need for money for handling the crops so that
| a postponement of the Russian loan until late in
the year viii be wise. Lower money rates in
| Europe permit the foreign exchange houses in
| the United States to continue the issuance oP
so-called finance bills, thereby lessening the
strain on the domestic position in money and
| also obstructing exports OF gold. Rates for
| money in the United States are enough higher
| than money in Europe to enable the exchange
! houses to reap a substantial profit on their bills
merely as a borrowing and lending transaction.
They either lend their bills or sell the bills and
| lend the proceeds They receive the rates pre
| Valling here and pay the smaller rates current
| In Europe for the credit they utilize there. as
| represented by the bills drawn on their foreign
! correspondents
When the exchange houses draw their finance
| bills against credit they are short Of exchange
| There probably viii be an advantage of being
! short of exchange this fall, the bills which
are now being drawn are mostly 6O-dav and 90
! day drafts, which viii mature at a time when
| grain and cotton bills will be plentiful and
| cheap These bills. calling for payment for
grain and cotton exported, will be purchased and
! used IN covering or paying off the finance bills
! when they fall due The difference between the
amount realized from the finance bills and the
| lesser amount paid for the grain and cotton
| bills will be much gain. The Indebtedness
| Of the United States to Europe on exchange ac
| count is already large. and by the further out
| pouring OF finance bills probably will be con-
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