Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-11-19
Prices Materially Advanced
on Change Yesterday
ON BANK STATEMENT
WEEKS LOAN CONTRACTION SEW
ERAL MILLIONS IN EXCESS.
Some Sensational Gains Made in Min
Ing Stocks - Speculation Reflected
Confidence in General Prosperity.

commence In IeneIEl IIoSPciity'
NEW YORK. November 1s.-Prices were
pushed aggressively on the stock market
today in the confident anticipation that the
bank statement would disclose the making
,1p of the deficit of last week in the legal
reserve The publication Of the statement
showed a surplus established of S2,915,1oO
above the - per cent legal requirement,
but tho movement of stocks developed some
hesitation and the closing tone was decid-
edly irregular, with many prominent stocks
showing small net losses from last night.
while the conspicuous specialtles held some
very striking gains.
While the bank statement showed the res
toration of the surplus the manner in which
# was accomplished. az indicated by the
changes in the various items, aroused some
questioning over the outlook. The cash Item
showed decline of nearly $2OOO,uO0, Whlch
Is accounted for approximately by the
known movements OF money, but show
practically no benefit from the supposed
private transfer of large sums to the banks
at this center from Canada and other
sources.
The improvement In the bank position
therefore is entirely due to the enormous
cut of S2T. 204, 900 in the loan Item of the
banks on September of this year the
banks recorded a decrease in loans of $50
237 500 which is the record figure, and on
October IA of this year the decrease was
$50. 456. eco. With these two exceptions, this
weeks loan contraction is several million
collars in excess of that of any previous
week in the history of the clearing house
II Is not supposed that the stock market
lauida ton. which was confined to Monday
and Tuesday, represents any such reduc-
ton of outstanding credits.
Foreign Exchange Advanced.
Foreign exchange was advancing again to-
day. while sterling exchange rate at Paris
and at Berlin moved against London again
Sensational gains were made In the prices
of the Federal mining stocks, those of the
southern steel companies, New York Air
Brake. several southern railroads. Ameri-
can Snuff. Brooklyn Transit and number
of Industrial specialties of a minor grade
The general movement OF prices was mar
row and hesitating
Total sales of bonds par value. 81 9l5.OoO.
The operations of the week in the stock
market have reflected the compelling infiu-
ence on confidence of the great prosperity
of the general conditions in the country.
Speculation based on that confidence has
been persistent in face of the restrictive
necessities of the money situation. Atten-
ton OF operators in securities has been con-
concentrated on money market develop
ments and the violent alterations OF the
week in money and foreign exchange con-
ditions have been followed closely in the
fluctuations in stocks
Spasm of Liquidation.
A spasm OF liquidation swept the market
IN the opening period of the money strin-
eency and in the later relaxation of the
money market stocks recovered to a level
we'll above the closing average of last
week. The violent advances in special
stocks had much TO do with making the
large average OF the recovery, but practi-
Cally all the active stocks IN the list had
the early losses more than restored.
The action OF the market seemed to dem
onstrate the determination OF speculative
hold TIT afT vhQt no
high interest charges, except where an ac-
tual recall OF credits compelled retreat
The threatening aspect of the money out
look at the outset ofsthe week seems 70
have prompted the large commitments to
the short side of the market, and the ne
cessitles of the shorts were a potent factor
IN furtherlng the later measures to restore
she level OF prices.
Influence on Speculation.
The sentimental effect of the showing of
an actual deficit in legal reserves of the
banks was OF great influence on specula-
tive sentiment. although the actual per-
centage of reserves to deposits report
eo in last Saturdays bank statement
showed a change Of less than l per cent
from the average condition of the clearing
house banks at any time for more than
two months past.
But II known that the narrow mar
Ein of the banking surplus during that pc
Rod had been maintained only by an elab-
crate system or transferring naNh loans 10
trust companies, foreign loans and other
sources. The discrepancy Of the cash
changes in the bank statement from week
TO week with the known movements of
currency indicated similar nterchanges be-
tween the banks and other institutions TO
affect that item.
This had led TO very general criticism of
the bank statement unreliable index
OF the actual banking situation. The show
ing Of a deficit Of legal reserves therefore
in last weeks bank statement, was accept
ed as warning that the measure of re-
sort to other sources for relieving the de-
mands on the banks themselves had been
exhausted. The % per cent call money
rate OF Monday the highest since the fall
OF 1907 and premium for securing sixty
and Hinety-day loans, which brought the
interest rate up to high as 8 per cent,
were the consequences.
New Resources Opened
The attraction Of these high money rates
opened up new resources TO the needs OF
speculative borrowing by the placing of for
e!gn funds through the medium OF the ex-
change market and by the bringing of large
sums 20 New York from Canada and some
or the domestic interior centers.
The cash demands upon New York banks
were also relieved by the Increased vol
ume OF pension payments and by a LESSEN
ed demand from the interior for moving
the wheat crop But with the decline in
the money rate and the renewed anxiety
cNe4 Nhe tpuultlouS IN russia there came q
violent rebound IN the foreign exchange
rate which threatened & resumption of for
eign pressure on our money market
This course of events demonstrates how
widespread and indeed universal is the
pressure upon the worlds money markets
10 cause the present conditions. In the
United states unprecedented trade activ-
ny higher prices prevailing for commodi-
tles some tying up of credits caused by de-
lays In freight transportation by the great
congestion and an extensive supplementary
demand
on these prosperous conditions afforded
abundant explanation for the large and
eager demands for money.
The Foreign Markets.
In foreign markets there can be no doubt
that the secondary effects are being felt OF
the great war credits which have been In
process Of iotatlon.