The Birmingham age-herald., 1906-07-01

SIr1CIlOn Ild5 Deen III elleClt d uoebu uCteci for a long time and 1t is believed the intended enforcement of the more liberal new provision will necessitate neverthe- less some scaling down of present loan &C., counts with individuals. The market closed slightly irregular at a rally due to covering by room shorts Many prom inent stocks. however show notable net losses on the day.
 Total sales of bonds, par value, $795, 600.
 There has been heavy liquidation in the stock market this week, and prices have been carried downward notably. In few cases the level touched was lower than that on the decline after the San Fran cisco disaster, but the average level of the market did not approach the point reached at that time. The motive of the liquidation is open to some dispute, and Is obscure in some points, but the fact Of 1t was obvious and was of decisive effect in shaping the sentiment of depressing ap- preaching despondency which had pre- vailed in speculative circles dependent for profits on the maintenance of values. Professional bear operators have followed the market freely, and their requirements to cover short contracts have afforded the only apparent support and basis Tor occasional rallies in prices. Such rallies have invariably been availed of for fresh liquidation. The same Is true of all OCT currences of favorable import to values, and such as might be calculated to in- spire a demand for stocks. Dividend in- creases, cheerful reports Of trade condi- tions and estimates of favorable outcome of the crops of large yields have been met alike by pressure of stocks for sale. The consequence has been the growth of a speculative party in Wall street, whicl dwells upon the term apex of prosperity, and sees evidence of oyer-extension and coming reaction in the general situation of affairs
 Evidence of over extension Is not lack ing the conditions in the money mar ket. These conditions are the key to the immediate situation in the stock mar ket value, where vulnerable speculative commitments are open to the first press ure toward retrenchment and building up of banking reserves. Many stock market pools of long standing have found them- selves obliged to reduce their lines and have found difficulty in selling to advan- tage at the high level of prices to which their operations had advanced their spe- cialties These high prices had the effect of throwing the rate of income return affected out of relation with the privilege interest rates for money, and of putting them into disfavor with the investment class of buyers who must be relied upon to form any substantial basis for the maintenance of values. Many high-class railroad stocks have been selling at prices which reduced their dividend return to a
  dend increases which are counted upon would fail to raise the income return to the level of existing rates for money in time loans. These rates have advanced during the week at 5% for periods of seven months and upwards, carrying over the end of the year, and speculative borrow CTS are reported to have bid considerably higher rates without securing accommo- dation. Offerings are scarce in spite of the high rates demanded, and the demand has been the largest for the longer pe- riods. Lenders have been disposed, never- theless, to keep their funds available by placing them in call loans.
 This explains the comparative ease of call money and the slight effect caused by the preparations of the usually heavy re- quir1ments of the July settlements. These have not been entirely without effect on call loans toward the end of the week and anxiety has been felt that call loan rates would work higher next week. The obligation of New York trust companies to increase their cash reserves on July Il were a complcating factor. The re- quest of San Francisco financial interests for deposit of government funds with their banks is taken as an indication that the return flow of the cash accumulated there after the fire is not likely to reach the full amount of the resources then col lected. The treasury department has de- cided to withdraw $10000.0O0 of govern ment deposits from national banks ac- cording to notice on July 10, to secure means for the intended deposits at San Francisco. A recurrent factor in the money market is the dissolution of syndi- cates by expiration which have under written capital issues and the necessity of taking up large unmarketed residues of these holdings. Instalments of sub- scriptions on new stock issue come due at intervals in the coming weeks and resources will have to be found for meet ] ing them Further capital issues are also looked for to provide means for the large enterprises of corporations already under taken. Real estate speculation and out law. east and west. is known to be on an enormous scale and there Is much discus | sion of the extent to which credits are tide up in this field. In presence of these conditions the extra requirements Of the fall money markets are looked forward | to with apprehension and the advancing l rates for interest are the measure of this apprehension. With securities still selling | at prices where the rate of return Is lower than that for money. natural disposition to convert holdings into money l is in operation The influence is observable | in the absence of the reinvestment de- | mand for bonds. which usually makes it's l appearance in the period preceding large dividend and interest disbursements. The l stock market is sensitive to reports Of crop damage, owing to the importance of a prosperous yield The same sensi- | tiveness is shown to reports affecting trade conditions as shown by the response to the cutting of southern foundry iron prices to the decline in the London prices for copper and to the shutting down of some of the anthracite mines. For