The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1906-12-30
Hill Shares and st. Paul Lead
in Downward Movement.
BANK STATEMENT NOT LIKED
Market Weakened by Retirement of
short Interests and Further Tn
settled Condition Probably Due to
the BOtched and Clumsy Method of
ST. Paul In It's Reissue Of stock.


ing the Stock Exchange session to-day.
prices Of the securities In which specula-
zion usually centers declined considerably.
The market was not at all demoralized.
and at the close prices were still well
above the low level touched earlier in the
week. The fall was most conspicuous in
the case Of Reading common. a stock in
which fluctuations have long been. for
reasons perfectly understood in the nnan-
cial district unusually wide
other prominent declines were those in
the Hin stocks and St. Paul common. the
last-named shares touching a new low
record made since the announcement of
the St Paul cOmpany's new financial
plan.
The AtchisOn, L. s. Steel, and Southern
Pacific shares were relatively the strong
est stocks in the market An effort seem
ed to be made at one time toward rally
ing the market under the leadership of
Atchison common. but this purpose was
soon abandoned and all the stocks named
sympathized 10 some extent with the fan
in values that went on.
The weekly bank statement proved
news from stock market point of view
Il was favorable because of an increase
in cash holdings OF the clearinghouse in
stiUutiOns of S4,501.0OO. the sum being
larger than had been estimated in any
forecast of the return.
Loan Increase Too Great.
The bank statement was not liked in
that it showed an increase in loans of
s. 7Sg. 200 although a decrease in loans
had been confidently looked for. Last
week as viii be remembered. the bank
loan account decreased only 100000. and
the weakness of the market last Satur-
day was rather distinctly attributed TO
speculative disgust over the fact that so
trihing curtailment had taken place.
The smallness of the reduction was
commonly explained as being caused by
the workings of the average system under
which the bank statement is computed,
and it was supposed that this week the
hank statement would more fully reflect
the liquidation that was known TO have
occurred. To-day's disclosure. therefore.
of an actual increase in the loans was
disappointing.
The probable explanation OF the matter
is. or at least was so regarded in banking
circles. where a clear idea Of the matter,
If it anywhere should prevail, that concur
Iently with the liquidation in the security
market here. there had been going on a
transferenCe of loans on American stocks
from London 10 this center. and there
had also been in progress a similar cross
ing of of obligations for purposes Incl
dent 20 the end of the years financial set
Elements by interior institutions; that is
10 say, interior banks in our own country
I-r 20 I IN
asked the banks of this city TO take care.
temporarily, of certain amount of loans
incident 20 operations in Wall street that
have for some time back stood upon their
books.
Market Is Weakened.
The feature Of the bank statement was
such as TO bring the bank surplus up 10
$780, or over Sl.000.000 above the sur
Plus at the same time a year ago. No
doubt the technical position of the market
has been weakened. to some extent by the
retirement of the short interests affected
during the brisk rally in stocks in the last
two days, and IL is not impossible that a
resumption Of speculative ventures for the
decline was as much responsible as any
thing else for tO-day's fan IN prices. The
floating supply of stocks in Wall street
is now somewhat greater than it was a
few months ago.
Many observers Of the market were.
however inclined to-day to the opinion
that a great cause for unsettlement at
the moment could be directly traced TO
the disturbed feeling now so general in
the financial district, which may be
moderately described as the bOtched and
clumsy method adopted by the Chicago,
Milwaukee and st. Paul Railroad Com
pany In making its reissue of stock
Other developments Of similar sort. all
proceeding from the same source and
all of a nature calculated to beget popu-
lar GOODNESS and hostility toward the Sc
curity market have not been uncon-
mon in the present year. and the cumu-
lative effect Of these blows is seemingly
becoming apparent The plan suggested
and that is seemingly to be carried out
which depTives a number of small stock
holders Of the St Paul Railroad of their
rights TO subscribe to the new stock that
has been authorized, is one Of the most
outrageous and scandaloUs violations of
equity in the history of American finance
and that IT should foster a sentiment ad-
verse to the stock market as a whole is
plain.
There were recurring stories to-day of
acute trouble in various speculative quar-
u
little more definite origin than they have
had for some time past. Presumably. too,
there was still some anxiety as to the
probable course of money rates on the
coming Monday.
Stringency Not Feared.
This viii be the time when the final
calling in of money for the great dis
bursements the day following will take
place, and whatever elements there are
making for monetary stringency viii. then
exercise their fun force. Among bankers
to-day the opinion was almost universal
that no extreme stringency would be ex-
perienced. owing largely to the proba-
bility that the leading banks Will, for the
purpose of the financial accommodation
% the public during the next few DAYS.
not hold with literal strictness to the
letter Of the banking law on the subject
OF the maintenance of the full , per cent
reserve
1t must be said, too, that this course, in
such an emergency as the present, seems
entirely justified It has been time and
again shown in periods Of financial stress
that If the banks would lend freely. re-
gardless. for the time being, Of reserve
requirements. a large amount of boarded
money in the hands of private parties.
kept for the purpose Of being lent at high
rates. would be Immediately released and
the money pinch broken.
Hysterical and excited bidding against
each other for money by stock exchange
firms ceases under such circumstances.
and il is at once found that there is
money enough to go around among all
those who need il. Further proof Of this
is to be addueed from the well-known
circumstances that, despite the pressure
Of money for stock exchange uses resoTted
TO every day of the pTeseat month and
the high rates for funds that have been
Tor some time exacted. there has been no