New-York tribune., 1906-12-10
THE WEEK IN WALL STREET.

II the industries of the country should be
seriously injured by the present condition OF
the money market, there would be ample rea-
son for bearishEess in stock market circles, but
Wall Street does not believe that business
throughout the land will be affected by high
rates for accommodation beyond the influence
OF temporary burden imposed upon borrow
ers. So the Street is not selling its securities
Naturally there are efforts by the bear element
10 depress values the strength of high money.
but declines are not extensive, and are about as
quickly recovered made. An eXOrbitant price
for call funds tends to restrict speculation by
people who have to depend upon borrowed
money and low bank reserves increase the eX-
pense Of speculative operations. while they make
necessary, in the absence of other forms OF re-
lief. the calling in of loans matter of pro-
lection to the reserve which is demanded held
by law as a safeguard for depositors. An ex-
travagant figure for demand loans is cur
rent-a rate which is not warranted by the
actual position of the money market, and which
reflects the advantage bankers taking of the
low condition of Clearing House reserves to
make fancy return on the accommodation they
extend TO operators in stocks who are willing to
renew their loans in order TO hold their specu-
lative accounts, in the firm belief that profits
will be secured from an eventual advance in
stock quotations that will offset present exces-
s4ve lending rates. These money quotations are
not hurting the mercantile community, as the
business of the country is not conducted on call
funds, but it is conceivable that if time money
and commercial paper should rule at the pre-
vailing figures indefinitely the nations trade
and commerce would be most adversely affected
Wall Street is being mathematical in various
quarters where intelligence is far under par for
present money market conditions. A certain eie-
;e for 4ha h
normal rates for call money, but the call money
situation is not injuring the public. and it does
not reflect a scarcity of funds for actual busi-
ness operations where borrowers are willing 70
pay the legal rate and a commission. Wall
Street speculation is not responsible for the
stringency in the money market, proof Of which
is found in the movement Of currency in the
last six months, and. in fact throughout the
year, in the movement Of loans of the associated
banks and in the course of trading the Stock
Exchange. There has been no wild speculation.
and there has been no active buying of securities
on margin account. The public is not in the
market. and has not been for many months, the
bulk of the recent trading having been for pro-
fessional account and in the interest of people
who the chief owners OF securities and who
have been well supplied with time funds to carry
them TO a period when rates for loans will de-
cline TO an easier basis. If there were a large
public following in the market monetary stTin-
gency would bring about big decline in values,
but there is no important weakness; indeed, the
market presents surprising strength. attesting
the fact that securities in the hands of people
who know that fundamental conditions are
sound, and that in the end these conditions will
carry prices to better figures. In the face of
36 per cent money last week there no i'm
poTtant liquidation. and it is quite probable tha:
if in the current week sales should be made as a
result Of Saturdays poor bank statement sub
stantial buyers will stand ready with open bags
to gather the offerings Of those who may be COM
pelied or frightened into parting with their spec
ulative or investment holdings.
Trade activity throughout the country and a
currency system which locks up the peoples
money in the vaults of the federal Treasury
have been the chief factors in the reduction in
the bank reserves at this centre and for the
high rates that merchants are compelled to
pay for accommodation New York has i'm
ported net. upward Of SSOOO0O0O gold in the
last ten months; it has received large amounts
of government deposits and has put out addi-
tionaI banknote circulation; yet the local In
stitutiOns have nothing TO show for this in
crease in the amount Of money in circulation
except a deficit in reserves the interior having
taken for trade purposes vast sums which have
helped to move record breaking crops and TO
place the country on basis of prosperity un-
equalled in the history of the land. One of these
days currency system will he reformed on
lines that automatically will increase and de-
crease the amount OF money available for trade
purposes as the needs OF the situation demand
and it is fortunate that some of our Congress
men at least at last waking up to the fact
of the pressing necessity for a revision of our
currency laws President Roosevelt and Secre-
tO do
thing. SO also is the Controller Of the Currency,
while bankers in most parts of the United States
talking and writing and resolving that a
act in order 10 save the country. Lack of cur
rency reform viii not plunge the country into
bankruptcy, but remedial legislation VIII in
crease the chances of permanent prosp ritv So
far there has been an unusually light movement |
Of money from the interior to this centre. ship
ments from here having far exceeded receipts |
and il is not likely that there will be a large
return flow of currency from the West until !
after the turn Of the year. Hence it follows
that unless there should be extensive govern |
ment deposits with the banks or heavy ship
ments Of gold from Europe to this side Of the |
ocean stiff figures for loans will prevail until |
after the end of the present month Though |
sterling exchange has been declining, the pros |
poets OF gold imports are not promising. as the |
Bank OF England is maintaining its rate at Il |
per cent. with the probability of advancing it |
in the event of an American inquiry for the |
precious metal
The Presidents message, the reports of the |
secretary of the Treasury and Of the Controller |
OF the Currency, the decision Of the Secretary |
or the Treasury To prepay interest on govern |
heht bonds. due from January TO May; the meet |
ing or the Chamber Of Commerce. at which the |
aIccusduoh was made by a prominent banker |
mat certain institutions manipulating the |