Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-05-13
Weekend Marked by Profit
Taking Sales.
TRADE VOLUME MODERATE
Recovery of Prices of Notable Pro-
portions.
THE MONEY MARKET RELIEVED
Foreign Investors Awaited Themselves
of Inviting Prices During the
slump-Industries and Crops.


rise which occurred during the week The
gain in cash shown was not as large as mad
\ been indicated by the known movements OF
N-noDey The movement of prices in the
stock market was unusually confused and
irregular Except for the realizing move
rnent after the bank statement there was no
time during the session when the general
tone was at all consistent. Advances in
prominent stocks were made a the same
time with declines in stocks of the same
importance.
The movement was not wide at any time.
and the volume of transactions was only
moderate. Banking opinion is not unaal-
NOUS on the outlook in the money market
The confident speculation in stocks is based
upon an assumption of growing ease In the
money market. which is expected to be fos-
tered by a return flow of currency fys,m
San Francisco as soon as banking IS re-
sumed there and further remlttances from
abroad by foreign insurance companies on
account OF the San Francisco fire losses.
In some banking quarters 1t is argued that
the early resumption of business activity
and OF reconstruction in San Francisco will
cause the retention OF the funds which have
been accumulated. Opinion differs also as
to the extent to which foreign insurance
companies have already made remittances
TO this country In preparation for paying
claims against them. The recent large In
ward movement of gold is alleged by some
bankers to have been largely due to the
course of remittances against insurance
losses. The market closed the low
prices OF the day
Total sales of bonds par value, 81. 7S5 coo.
Recuperation OF Shrinkage.
The recovery in the stock market. which
was inaugurated last week has attained
notable proportions this week and much
progress has been made toward the recu-
peration of the extensive shrink 3ge In mar
ket valuation resulting from the forced
liquidation to which the market was SUBJ
Jected after the San Francisco calamity.
The improvement is owing In mixed degree
TO the relief afforded by the drastic liquida-
ton itself. to the covering requirement of
the bear party. which over-extended its
operations on the score OF the weak condi-
tons In the market and to some factors OF
positive betterment of conditions of which
the outcome was formerly doubtful or I'M
promising.
The relief afforded by the liquidation has
made Itself felt naturally through the
money market. Funds have become abundant
again In the market. and rates for call
loans have relaxed from day to day The
effect on the loans was more gradual, but
IN that department also rates have eased
until loans were obtainable for periods up
TO six months for low as 3 per cent
With the fall In prices of securities which
occurred during the liquidation, and which
affected bonds as well as stocks. the basis
OF the Investment return on securities was
better adjusted 20 the prevailing interest
rate in the money market especially since
the interest rate on money has declined.
Absorption of Securities.
TIE course OF the stock market offers evil
dence that there has been some substantial
investment absorption Of securities. es-
pecially at the low levels Of last week. BUY
ing by substantial banking interests at
that time was for purposes of supporting
prices, and part of the holdings thus ac-
neNea 1ags l..
prices recovered. But ii IS believed that
large holdings were acquired for retention.
Foreign investors seem to have been at
tracted by the inviting prices offered by
our securities. and 10 Is reported that some
large blocks OF bonds We're placed with
French investors and at other continental
money centers- This serves to take up
some part OF this countrys floating indebt-
edness to foreigners which had reached
large proportions. II was even supposed
that the large shipments OF gold to This
country were I'm the nature OF borrowed
sums.
Future maturites Of these foreign obliga-
tons especially with the large require
ments now anticipated for the fan money
market. threatened 4 serious problem and
the conversion or this debt into more per
maneut form by sale OF Understanding
securities tends 20 the relief Of the money
market was SO far effective that the arrest
or the gold import movement was Viewed
without disquiet
The Bank OF England was beginning to
show anxiety over the proportions of the
drain New York was making upon its re-
serves. but the cessation Of the gold move
ment seems due much to the relaxation
OF New York requirement as TO the oppos-
ing pressure OF measures Of protection
The London Market.
London discounts did advance early in
The week. but have since relaxed and the
Bank Of England refralned from raising
its official discount rate as It was feared
would he done.
The Paris money market has also relaxed
eud the sterling exchange rate at Paris
has moved toward the relief of the London
money market.
Besides the easier tone OF the money
market the clearing of the labor situation
has removed a cloud from the specul tive
s'tu1tion. The agreement reached between
anthracite miners and operators 20 avoid
strlke was accepted with great satisfaction
IN the financial district. not only for the
immediAte issues involved. but for the coll
lateral effects on the general Industrial
Situation.
The same may he said of the return to
work Of the freight handlers on the great
iaNeS the cessation OF traffic there
awakening especial anxiety regarding the
supplies or material for the iron and steel
industry Heavy orders for steel rails for
100 delivery have been the feature In that
trade \ falling oN IN output Of iron for
April was without @scoura ging effect on
the tone of confidence In that trade. The
improved sentiment IN the speculation was
unaffected also by the admission by rail-
road trafic officials Of some falling Off In
trafhc Offering. I'm spite OF freight diverted
70 the railroads by the lake strike and
some extra shipments OF material to San
Francisco.
Cause of the Recession.
The recession was attributed to the period
OF activity In the fields In preparation for
crops Stocks showed no sympathy with
the shade OF anxiety reflected in the wheat
market on account OF the unseasonahly
cool weather. The governments monthly
crop report was OF superior influence The
hieh condition OF the winter wheat crop
was regarded was satisfaction and the de-
crease IN acreage by winter killing was no
greater than was anticipated
The Improvement In the Immediate money
situation has thrown into the background
the ultimate requirement in the rebuilding
Of san Francisco and demands for other
large enterprises which doomed formidabiy
In the prospect OF a period of stock mar
ket detection. The recovery In stock in
spires some distrust from the technical
standpoint and keeps professional attention
awake for signs OF reaction But the un-
dertone Of sentiment remains confident IN