Omaha daily bee., 1906-10-20
FELT AROUND WORLD
Tank Of England Raises Rate of Discount
TO Six Per Cent.
H. FINANCIAL MARKETS DISTURBED
Ao..ou Due to Continued Calls for Gold
from Abroad.
STOCK TRADERS RUSH TO COVER
STOCK TRADERS RUSH TO COVE
O,nSols aud American Securities Drou
Sharply on Announcement.
EFFECT IN NEW YJok Is PRONOUNCED
Market is Confused ana DemoraIi,ed.
Leading Issues selling on
from one to Five
Points.

LONDON, Oct. 1s.-rhe Bank Of England
raised its discount rate to per cent this !
morning. Changes In the discount rate
OF the bank on any day except Thursdays
nave been few and far between and not
since November Z 1890. Just before the
Barring failure, has tho rate been put TO
per cent. The relapse in American ex-
changes, indicating a renewal OF the de-
mands for sold and the probability OF larga
Withdrawals Of the metal for Egypt
seemed to have contributed 10 the action
taken by the Bank of England today
Inc sum OF S50oO.O00 in gold leaving the
pahk today Is said 10 be destined for
Egypt, while financial circles anticipate
very large purchases in behalf Of the
J United States, irrespective Of whether the
| rate exchange does or does not render the
| transaction profitable Reports arc also
= current that the Imperial Bank of Germany
rs conducting large bullion movement for
russian account, while Argentina is in the
market rs purchaser Of gold The null
tiplicity of the demands for the metal, ii
is pointed out, emphasized the necessity Of
protecting the already depleted reserves Of
the Bank of England
Consols for money declined 7-16 to s5s.
after the announcement of the increase in
the bank rate
American securities were depressed
Union Pacific lost q and the rest Of the
list hQ&, compared with yesterdays New
York closing
The increase in the discount rate was a
complete surprise to the members OF the
Stock exchange. Prices gave way sharply
and at o'clock consols showed a further
loss or Is being quoted at S5% at that hour
Other gilt edged securities declined in sym
pathy. The American section continued To
feel the depression and late losses ranged
from u to Ia.
AS the directors of the bank separated
yesterday without changing the rate OF
discount. IL is assumed that they have
since received information of impending
gold Withdrawals from the banks reserve,
which declined during the last two
months, and is now in such a position
that the directors consider IL necessary
TO stop further depletion to any consider
able extent. The banks report yesterday
showed that the outflow had been slightly
abated, the reserve standing at s9I,sO9,-
900. or a gain of s2,5o0.O0o for the past
week. However. this was not considered
10 the working margin, as the reserve
lost about S46. 900 during the past
six weeks. The board of trade returns
show the extent to which the United
States absorbed this gold. the report set
ting forth that the American shipments
were nearly s60OO0,000 for the first nine
monthslof the present year, against less
than S5000,000 for each OF the preceding
years. II is. this steady outflow which
the increased bank rates seek 10 check.
Effect in New YORK
NEW YORK. Oct. l9.--The New York
stock market opened weak and lower. The
r. first quotation was in Atchson and showed
a decline of rs. other early declines were
Anaconda, 5sl; Canadian Pacific, 2ss; Bal
y timore & Ohio. III: ST. Paul and Smelling
fad
vania, 19s; Steel preferred =, and Union
Pacific. ~.
The opening OF the market was very con-
fused and almost demoralized The OPEN
ing pressure to sell seemed to come chiefly
from arbitrage firms which desired to dis
pose Of stocks at any quotation above the
: London prices. The first to suffer were the
stocks in which speculation has been active
recently, Union Pacific, AmGlgnmated Cop
N>per and Reading Rumors were circulated
here that the Bank of Englands advance
had been caused by threatened financial
trouble in london but there was no con
firmation whatever of these reports
After the first selling movement there
was a rally. but the better tone did not hold
and toward II o'clock prices began TO fan
again. Reading, which closed at 15l% yes
terday. sold below 14S. Northern Pacific lost
aud others sold down sharply.
\ vice pfeSuSnt OF one OF tne leading
banks said: THE increase in the London
hank rate is easily accounted for. The re-
serve Of the bank has been depleted until
yesterday II reached e1S,O0O,OOO Today
there was a draft for &S0000 TO go to
Egypt With the rate of exchange as it
stood was within the possibilities for us to
draw gold from London While yesterday
we notified them that we should not do 50,
they evidently felt that so long as it was
possible to withdraw gold for this country
at a profitable rate they had better protect
themselves. and for this reason the rate
was increased We see no occasion what
ever for alarm in this action"
on tlie floor OF the Stock exchange the
.~Ncenes throughout the first hour were un-
usually exciting. Traders who had felt in
olined to take the bull end of the market
because OF tho increased Copper dividend
Immediately sold the active list The bulk
of the early trading was I'm Union Pacific,
Reading, Copper and the Steel stocks. Com
mission houses sold heavily. largely for
out-of-town account Much OF the selling
x,as without notice to customers There
u,erc hurried calls TO meet impaired mar
gins The business of the first hour was
,vitbin a couple hundred thousand of yes
terday's total operations Just before noon
cau money was quoted at 6lk per cent and
some small loans were made at per cent
A, paris. Boston and philadelphia.
( PARIS, oct. 1s-Prees on the Bourse to-
A., we're heavy owing TO free selling due
a. tbs unexpected increase of the Bank OF
Ensland's rate from TO 8 per cent Rus
90 imperial As OF 1904 closed at 72.O5 and
re Russian bonds of 1904 at 4s3
RosToN, Oct. ls-The weakness of the
New York Stock market which followed
~. raise Of discount 10 per cent by the
-, q, england, resulted in a sympathetic
= s--.-..s,on In the Boston market in the
49,, trading. Later the market recovered
~ .toadied. but the rally did not hold
- soms OF the stocks receded 20 the open
- nrtees. Anaconda. which opened on 6
-. from yesterdays closing, rallied to
=. but fell again to s'S'A