The Washington herald., 1906-10-21

weakest on tho List, L. +. Is Next.
New York. oct. 2O.-In considering The
inquiry whore all the stock sold IN the
last two DAYS came from. tile lack or
speculative interest in the market pre-
vlous to the slump is q point of great i'm
portance. The public interest had shrunk
So very small proportions ana Tor thaI
reason the amount Of weekly held stock
was not large. The strong interests I'M
derstanding the situation hardly sold
much. and the more the matter is consid-
cred the more forcible becomes the con-
clusion that there has been a great deal
OF selling by people who did not own
what they sold and who sooner or later
must buy back to cover contracts
Traders whose knowledge OF the intrin-
sic condition is not very deep have be
come bearish on the market on account
of their failure to recognize that the rails
ing of the London bank rate is England's
trouble and not ours. They falsely argue
that the whole matter is the outcome OF
The locking UP of funds in the United
States Treasury and the borrowing of
money abroad 10 meet the deficiency thus
created.
They argue further that the borrowing
of foreign money has impaired the ability
OF those who lent it to buy our products,
and that. taken altogether, the country
has been going entirely too fast m mat
ters of "a financial nature. This is just the
sort OF view the foreigners would Ike to
present. and which, indeed, has been set
forth I'm the English papers consistently
Tor months past; but it is wrong, very
wrong.
soon VIII Import Gold.
What has actually happened is that
New York has been discharging its for
cign Indebtedness at "a phenomenal rate,
and that the inevitable outcome viii be
imports of gold on a heavy scale IN pay
ment for American exports. In cotton
alone there is fair reason FOR the con-
Germs shown boy the Bank of England
over the maintenance Of its gold supply
for there is az present loaded on vessels
awaiting clearance a total Of fully 100000
bales while an aggregate of 240,oV0 bales
was shipped within the week. the money
value OF the combined totals being in the
ueighborhood of $2S.000 600. With other
lines of exports running into very high
on at an unprecedeutedly rapid rate.
One effect of the present uneasiness
over the action of the Bank of England
will be TO remove the probability of an
snte-electiOn shakedOwn. II has been
doubted for weeks if there was really the
making of a scare in the Hearst candi-
dacy for the goveruOrship of this State
and thc fact that the weak element
which could be shaken out on change
in the betting on anything which seemed
To Indicate "a loss of ground by Mr.
Hughes, has already been eliminated tends
10 the Improvement Of the speculative
position.
New Financial Center.
The sight of the Bank Of England max
ing extraordinary efforts TO prevent the
flow of gold to New York, with every
appearance that the measures taken will
avail nothing. is enough to encourage the
expectation that this city viii become in
time the financial center of the world
For many years it has been the dream of
many people in Wall street that such "a
consummation might come to pass, but
never before did the outlook for realiza-
ti0n seem as bright as Il does now
The test of strength has come, and
London after throwing down the gaunt-
let, seems unable TO reclaim it. The tug
of war finds New York the fav0Tite in
the betting, and the valuable prize-the
available gold supply-Which England is
trying 10 retain. must come here because
this city has brought the greater strength
10 the contest.
Years ago New York looked to London
to make quotations on American stocks.
Now the london attitude is but little
considered. The eageTness with which the
quotations from London were formerly
scanned is no longer manifested. and if
the foreigners slight our stocks, the fact
is passed over with such remarks as 1T
is "a pity they don't know "a good thing
when they see it,
Every one here knows the good things
in American stocks the prices of which
would be much higher if the shortage of
the circulating medium had not inter-
feTed with market movements such as
should have accompanied the rise in val
ues. When gold comes here, as it must
come. and the pent-up force of values, far
in excess of quoted prices, is realized,
stocks viii move in way not only to
convince our English friends that every
thing is all right here, but 10 attract the
attention Of continental Europe more
strongly than it has ever been attracted.
Reading shows weakness.
IT any single stock could be picked out
as the weakest on the list it viii be
probably Reading. There was no special
news 20 accOznt for the selling. and, per-
haps there were reasons why bearish
operations should not be carried too far
I'm this stock. The market was under in
huence of a matter which caused heavy
selling of stock by English holders. but
r1sa
lite Of spectators on The other side OF
The Atlantic
On tie contrary. it was the action by
some very strong interests here that had
been the main factor in the stocks phe-
nomenal advance. and so completely have
these interests the entire situation i'm
their control, thar they could. il 50 in
clinCd. make the position of the short in
terests very uncomfortable.
If. ON the other hand, they want TO let
the stock drop down, so as to influence
the general market. they viii find the
traders working with them. London, not
having much of the stock. cannot add
apTTeCiably TO the floating supply. al
though some SPECTATORS over there have
not hesitated 10 cast their lot with the
short interest. With the prepouderanee
of short selling the position of the stock
st present Is full Of possibilities
Union Pacific sold Freely.
Transactions in Union Pacific reached
larger total than in any other stock,
with the exception Of Reading. and large
ly exceeded those IN the latter on a par
basis. A good deal of Union Pacific held
by speculative interests for a rise was
thrown over, and beariish operations We're
conducted OF q scale which induced many
observers 10 believe that large interests
in The property. having sold stock on the
rise above lae were helping along the de