Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-04-02


Inmates as to its character Notwithstand-
ing the weeks enormous demands for cred
Its the banks report contraction in loans
of upward of S1O,OO0,UOO. The only explana-
ton can be that the credits outstanding i'll
the stock market by the banks have been
withdrawn to that extent to meet require
Inents in other directions and that loans
have been made through trust companies
and through other sources. There is no
room to doubt that the volume of credits as
q whole has been substantially expanded
during the week. The indicated loss of
cash of $i.0OO000 is reduced in the show
ing of the bank statement to about $500,
600 The net result is Improvement in
the margin of surplus to the extent of
81. 1880.
The appearance of the statement had an
encouraging effect on the demand for
stocks but the days notable movements
were confined to the list of specialties. This
is in accordance with the protested expec-
tation of the trading element that the
movement to be looked for is to lie in this
class of stocks
The days operations were almost wholly
In professional hands, but were indicative
of a confident feeling that next week will
see a revival of speculative demand and
quick relaxation in the money market.
Banking opinion on this point was by no
means agreed, in spite of the nominal
strength of the bank statement
The shifting of loans to the trust COM
panies and to foreign bankers while 1t af-
fords relief to the resources of the banks
themselves, nevertheless makes real in
road upon the available supply of credits.
Additions constantly made to the list
of new bond issues, which will add to the
requirements of the money market, and the
extent of the interior demand for money Is
an unsolved problem. The reviews of the
mercantile agencies point to highly pros
porous conditions in all lines. and these
were a factor in the day cheerful Sentl-
ment.
But the activity thus indicated promises
a continued wide demand for funds In all
lines of business. The market closed barely
steady and below the best. Total sales OF
bonds par value, S2,1I0,O0O.
Prices of stocks have given ground this
week, but in an irregular and restrained
manner, the decline being interrupted by
recurrent rallies. This was believed to be
due to the frequent covering of short con-
tracts by the bear traders, who thus testi-
fed their lack of confidence in their. posi-
ton. There was also evidence of support
by buying orders at times when the tone
became conspicuously weak. The hesitation
has been ascribed principally to the money
position, which has prompted conservatism
in making extensive commitments on cred
its subject to immediate call. 1t is believed
that the limitations of the money supply
are due to temporary causes.
The attitude of the trading has been to
degree a waiting one. until the situation
is cleared up. Aggressive opera tons for
advance have been c----nued mean
time and even support is less effective.
But the party of reaction has not operated
with any holiness. The strength of the
general situation has inundated them and
the developments of the week have Of
fered nothing to suggest any impairment
of actual values.
Trade and industry are obviously ex-
panding still But with money market re-
lions in stocks have been lacking and the
rates of activity in securities has decreased
materially. Last weeks bank statement
showed that the surplus reserves had been
protected by reduction of the deposit LA
bilities by contracting outstanding loans.
The demands TO be met during the week
caused strong conviction from the outset
that loans would expand for the week
With the surplus already al a low level
there was the likelihood that loans would
have 10 be called from the stock market
TO meet other requirements and to preserve
the legal reserve. The calling of loans did
take place, but in unexpected moderation
Each day during the week there was fear
mat Hurry would occur in the money
market before the day was over The ten
dency toward recovery in the latter mart
OF each day on the stock exchange marked
the sense of relief at the tranquility of the
money market.
The subscription to the $4,000 coo INSTALL
Wept OF the Japanese loan was the princi-
pdi event in the money market. The large
subscriptions offered for account of do
nestle interior institutions was the occs-
sion of remittanCes from the interior to
New York, which carried their own pro
lection Of the money market SIbscrin
tons were reported here also for Enronaar
account. and it is believed that remit
tances IN preparation for these had TO do
Win the recent weakness of exchange.
Whlch carried the rate near to the gold i'm
port point. Exchange has recovered this
week, and Paris has renewed its demand
on London for gold. The Bank of Eng
iahu return for the week disclosed a yery
large resort to that institution for cre6its
to relieve the open market
MS situation abroad has modified the
previous confidence that resources warc
open Tor relief from foreign money mar
kets In case of need here The week oner
ed with an intmation from the treasur,
authoriues that an additional call for re-
turn or government deposits to the amount
OF Sl3,UO,O)O or s20OOOOGO might he ey
pected during the spring. The weeks re-
Guire e included the April / settle
menus known 10 be unusually large this
year Beyond lies the subscrintion 70 tbo
pennsylvania railroad bond issue of 500
ooVNo Other large capital issues are al
ready announced and still Others are know,
TO be In contemplation
reports or condition of national banks
as Oh March IA in course of receipt by the
cohtroher disclose a large increase in de-
posts and In loans and discounts over
those OF year ago and of three months
ago. iiH
But the proportion of reserve to liabilt-
N4.L' Si44S IONer throughout the
country. The high level of trade activity
ana the unprecedented volume of bank
clearlngs promise no abatement in the sea
sonabie demands of the interior for money
IN spite or the apparently invincible ease
OF the New York money market I'm To
thls Time the consideration of this prospect
enJoins degree of caution in the extension
Of credits.
report gained currency that the G,
Paul road was planning a $780, 600 ex-
tension TO the Pacific coast to maintain It's
strategic position against the Northern Sc
curities group, and this suggestion al
though officially denied, proved disturbing
to the large hopes of developments in that
group upon which great speculation has
been based But the joint participation in
the Pennsylvania bond underwriting of the
two great banking houses representative
OF rival groups In the railroad world was
considered gratifying evidence of improved
harmony
The firmness of the cotton market In
lace or the enormous crop indicated by the
government report on cotton ginning was a
satisfactory basis for the holders of the
great crop. This clears up one of the
very few cloudy spots on the commercial
horizon. Railroad net earnings for Febru-
airy make comma fison wit laS