The Washington herald., 1906-10-22
STOCKS IN 4 DECLINE
Bank of England's Action
Has Effect in Wall Street.
COTTON A SOURCE OF ALARM

tO ANOBH ~ ANnb N0h'N Va
Increased Discount Rate-Goid Out
put Doubled since 1896, ana StiII
Greater Increase Looked For.
New York. Oct 2I-UnuI near the close
OF last week there had been during the
week no break in an almost absolute
calm maintained by the security market.
Prices Of stocks rose a little one day and
fell the next. and the market was of a
sort that seemed heavy to those who had
bought stocks and exceedingly strong %
those who had sold them. Its firm I'M
dertone was not changed in the slightest
degree, and good Judges declared it TO
be their belief that nine-tenths of the
dealings in stocks were caused by the
operations Of professional room-trading
spectators.
Yet if there were any indications that
great financial interests were busyins
themselves in any effort to advance the
market there were no signs. on the
other hand. that any liquidation was go
ing on; and if was the general testimony
of the large commission houses that they
We're in no way oyerburdened with stocks
carried speculatively for the rise.
When il became known that Amalga-
mated shares had been placed practical
~ on an per cent dividend-paying basis.
the stock market betrayed no strong tend
ency to advance. and when on the sue
cecdIng day the Bank OF Englands dis
count rate was suddenly advanced to
per cent the stock market of course de
clincd rather heavily.
Money Rates StiffeB.
I The money situation has thus once
more become the central factor Of inter
est from Wall street point Of view.
Signs were not wanting earlier in the
week that the downward swing IN money
rates that had been going on unInter-
ruptedly for some time past has been
continued as far as II was likely 10 be
The opinion was freely expressed in the
large banking houses that at 3 IL per
cent for call money and from 3 20 ; "a
per cent for time funds stock commission
houses were getting their financial sup
plies more Cheaply than actual conditions
warranted, and two or three days before
the Bank of England raised its rate
money rates here began to stifleu.
What was disclosed in the English mar
ket was. Of course, that whether OF not
by reason Of any exceptional circum-
stances in the case. the Bank OF Eng
lands discount rate of per cent. as
fixed week before last. was not effective
IN preventing the export Of geld from
London, and as the banks financial con-
dition. although IL had Improved, was
stll weak for the time Of the year, the
directors Of the institution had no t.
course but % take a further step for the
protection Of their money.
II IS clearly true that recent events that
could not be fCrescen or measured earlier
in the year have exercised an important
influence IN English financial matters For
one thing. a series Of disasters have hap
pened 10 the cotton crop IN this country,
so that the promised crop at present IS
certain Of a yield not greater than viii
be adequate for the needs Of consumers
throughout the season. GutaUEht by the
lesson Of the 'Sully corner in cotton,
whose memory &c might be supposed
would be stili fresh IN their minds. the
English and foreign cotton spinners have
allowed their stocks OF cotton this year
10 fan 10 q very low point. calculating
upon an enormous crop OF this staple IN
this country to furnish them their supplies
of the article at low prices. This hope
has been dispelled. and the English met
chants have been compelled 10 buy COZ
ton here on a rapidly rising mark -
Money Is Lying Idle.
The experience Of the year has proved
that there is q great deal OF money avail
able for the use OF borrowers in this coun-
try. resting In o sO-called invisible sup
ply. Whenever The money rate advances
far enough 10 tempt borrowers there is q
seemingly unlimited sum put out in this
market by the interior banks Of ths
country and private lenders Of every de-
scTipUOn. Il IS known, fer instance, that
scores of millions of dollars have been
from our market in recent
weeks by lenders who declined to part
with it at ruling figures but would will
iugly do so al an advance or TO per
cent or call money rates. Nor can any
observer Of the financial situation leave
out foT one instant in his calculations the
and constant influence exercised
upon monetary conditions by the Increase
in the production Of gold. Every week
sums CT money running from S2.0J00J0
upward are laid down in new gold in Lon
don the worlds central market for such
supplies
Gold Output Is Doubled.
Since 1897 the worlds production o. gold
has increased almost at the rate OF $50
GOO. coo q year, as compared with an in
crease Of but 100000 year for a long
time preceding. Since 1886 the yearly pro-
duction of gold has doubled. despite the
vast interference with the output of the
TransvaaI mines caused by the BOer war.
and it is considered certain by experts in
these matters that in ten years more the
worlds production Of gold Will again
double Not only is the Transvaal pour
ing out gold now ut a greater rate than
ever, but enormous discoveries of the yell
low metal have been made in our own
and other countries, a further help being
the great increment in the output
arising from the quantity Of gold taken
cut as a by-pU0duct from the copper and
silver mines.
The rise in the value Of copper and sill
yer has. Of course, led 10 "a great develop
ment OF the mines carrying these metals,
and the amount Of gold produced in the
process of this copper and silver mining
forms no inconsiderable quantity of the
entire volume Of new gold brought for
ward The effect of this increased gold
production upon the price of commodities
and securities is now apparent every
where.
X is almost needless to observe that
the country's bright business prospects
continue TO improve and that the only
matter that troubles our railway man
ayers and our merchants and manufac-
tuners of every description is how to take
care OF the business that offers
With ali this prosperity present. and
with the assurance that in the beginning
of the new year. al the very fUrthest. the
demands for money I'm the great financial
eenters incident to the agricultural ne