Los Angeles herald., 1905-11-14
BY Associated Press.

BY Associated Press.
NEW YORK, Nov. 13.-The banks of
which the deficiency of reserves
brought the averages reported in the
Saturday bank statement below the 25
per cent limit required by law were
under legal constraint to reduce their
outstanding loans. This they prompt
ly proceeded to do today and threw
upon speculative borrowers the neces-
sity for liquidating their holdings of
stocks in order to respond to the calls
for repayment of borrowed money. The
rate for call loans ran up early in the
day to rs per cent and very large sums
We're loaned at that rate. AS conse-
quence there was ftful liquidation of
stocks during most of the day.
On the successive dips in prices
caused by the outpouring of liquida-
tion there was buying of an impressive
and substantial character, so that the
course of the market was held well
liquidation conducted without any ap--
pearance of fright. The intervals of
RELAXATION Of the pressure upon the
the demand was not inclined to follow
the recoyecies and the rallies brought
dullness in the trading.
was greater than at any time since the
autumn of 1902, and this induced a
disposition to draw parallel between
that and the present period. This dis
position was encouraged by the fact
that the general supposition regarding
the recent speculation in the marke+
class Of spectators who have persist
emily ignored the warning of the
growing construction of the money
nfhid Confidence in the sufficiency Of their
resources to sustain their speculations
in the stock market. In this respect
and the fact that the speculation at
that period came to a disaster sug-
gests conclusions unpleasant from the
present standpoint. of speculation.
But the contrast which the 1902
period must take account of is the
constant shrinkage industrial and COM
mercial activity at that time, the in
fiuence Of the great anthracite miners
strike, of the beginning of the North
ern Securities litigation and the effects
which were still felt at that time of
poration securities and the resulting g
market Indigestion which was the
leading characteristic of the period.
None of these unfavorable facts has an
exact parallel in the situation at this
time.
Confidence in the prosperity and sta
bility of general conditions Is quite
universal. This must account for the
material support which developed for
the market on any substantial declines
and which was clearly in evidence in
In spite of the lofty flights in the
money rates rumorS persisted of some
early measure of relief soon to de-
velop. These consisted for a time of
relteration of reports that the treas
ury department was to intervene, but
the official announcement of Secre-
tary Shaw's indiSposition to take any
measures unless convinced that busi-
ness interests, as distinguished from
speculative are likely to suffer offset
these rnpOrtS
The Violent fall in the foreign ex-
change rate gave rise to consideration
of possible import movement of gold,
making sudden reversal of conditions
two weeks ago, when possible exports
be the outcome on the gold movement
today's high rates for money were ef-
fective in Inducing the placing of very
heavy sums in the loan market for the
account of foreign capital
Not only call loans, but time loans
for the sixty and ninety days period
were affected by the money stringency
today, terms for securing loans for
these periods bringing the rate of COM
pensation for the use of the money
we'll above 8 per cent. The substan-
tial recovery in the market was due to
the good effect on the relief afforded
to the money market by, the break in
sterling exchange.
Tho late rush in the money rate up
to 25 per cent was not regarded as
normal, any more than the sudden re-
lapse to per cent, but the effect was
unsettling on the closing tone, which
was irregular, but with some prices
at the highest point of the day.
Bonds were weak; total sales, par
value, SS,735,000.
United States 5s advanced Is, and the
old As q per cent, on call.