The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1905-09-11
Autumn DECLINE
IN STOCK I0|:|.C|,'k NJ ] ! I
Reasons for Drop and Probable
Extent Of Movement to Be;
Expected.
COMPARED WITH OTHER YEARS
When An Autumn Break
Usually Ends and What
Follows.
COMPARED WITH OTHER YEARS.

Especial to The rlmcs-Dlsputch.

NEW YORK, September 10.--,Thc Even
Ing Post, discussing the financial sltua-{
ton, says:
There are three possible explanations
for a decline In prices, such as has oc-
Cured during the present month 1t may
be response TO some genuinely unfnvor-
able development in the financial situa-
ton, as was the case In the midsummer
decline Of 1903. 1t mayttlike the severe
break in last Decembers market, be SIM
ply, consequence, Of overspeculntion,
/ ped Itself up. Or, again, such a. decline
may mean nothing except that supplies
of capital which hhd been used In sus-
tainng q market, had to be withdrawn.
new, securities appearing on the same.
market or perhaps, because OF he act
ual outflow OF cash reserves from the
banks whose credit had been employed
hardly be supposed TO apply to the pres
ent case, because practically all the news
Of the month has been favorable.
September Reactions.
Opinions will possibly differ as to the
theory Of reaction from a speculation
which had been carried pretty far, but
all observant fnanciers admit that the
outflow Of bank cash. and consequent
loss of Vspeculatlve resources, have. ut
least been important factors. But since
the 'harvest demand, for Eastern bank
money occurs every September. the
question naturally comes up why, II
decline in prices g inevitable; under such
conditions, anybody should be surprised
at decline in the early autumn, or
should be otherwise than prepared for It.
But do tho autumn harvest withdraw
ais" always bring about weakness In
stocks? This is the really interesting
question.
There are not many exceptions, but last
year was one Of them, and that IS posi-
bly, one reason why Wall Street put SO,
little faith in predictions of an autumn
decline this year. 1t Is asking good
deal Of the average spcculntor to Insist
that his memory be carried back definite
~ for a longer period than twelve months;t
Reasons why no autumn decline occurred
New York's s57.Ooo,oo0 surplus bank re-
serve. at the end Of August. was the
largest but one of all the returns at that
date in banking history. 1t was so large
that the question OF providing for mar
vest requirements was matter OF COM
plete Indifference AS to preceding years,
the story Is rather curious.
A Glance at Recent History.
The September Stock Exchange crash
OF 1908 came little Gter IN the month
than the present date. but was ex-
ceedlngly violent when 1t came. It was
chiefly a response to the profound dis
trust over Industrial finance which
spread throughout the Investment COM
n,unlty after the Shipbuilding scan
DIAL the Consolidated Lake superior col
lapse. and the tangle In which the steer
CORPORATION had involved Itself through
its attempted stock conversion plan. IN
1902 the September decline began our
ing tho second weekl and soon at :.
tanned great violence. Unlike that OF
1904 the autumn decline was IN no re-
snect provoked by bad news In finance;
developments were everywhere favor
able, notably in the harvest country.
Tut the oyerdone speculation ana inc
undermined bank position both existed.
prIccs higher than we're again reach :
ed until this year had been scorea on
the basis Of ''pyramiding operaVoh
nv the Western spectators. uslnR enor-
| NOUS sums of borrowed money ms
NJ the moment when the bank surplus,
nndinr the month of August only a trihe
above what it was last Saturday was
ontirely used, the statement Of Scptem-
hor Goth. reporting . $4,000 900 deiicit.
Naturally. the ''pools went to the wal,
hit not until their struggles had utterlS
deranged both money and security mar
kets, -, 80. l., thc
"The repeated weakening OF prices ~ IN, tne
autumn Of 1901, beginning WIN wy r m,s.
/ vcok of September, more CLOSELY reson.,
hled 1903 than 1902 so far as causes Were
noncorned The bank position, to be sure,
was not strong, but the immedlate ctluse
! ~ Weakness was the series OF events
such rs president McKinley's death and
the breaking down OF the Alnl.sn'', -, y
connor's scheme to rig the copper lra'
~ rhorn was n very general septem-
her decline in the markets OF leoonprop-
| n hiv more q consequence OF tho West
large withdrawal OF currency tnah OF
the Impending election, Tor no one w