The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-04-02
THE K1NANcrAL sIrUATION.

The stock market showed pretty plainly
last week where it's heart lay and also dis
closed with reasonable clearness, accord
ing TO all traditional ways Of estimating
such things, the general direction in which
it's feet were pointed. It was a market
that, as the spectators said, wanted to
90 up.' In spite Of indications, that toward
the end Of the week became conclusive,
that there was to bea suspension, or partial
Of labor in the anthracite and bituminous
coal mining sections, prices OF securities
steadily advanced. Generally the market
was weak and strong on alternate days,
but the advances when the market was
strong were greater than the declines when
prices receded. and there was a recurrence
Of that phenomenon, whose significance
Wall Street was not slow to grasp, OF dul-
ness In the market whenever prices feu
of. Offerings Of stock became less at
lower market valuations, showing that
there was no volume OF stocks pressing
for sale in the hands Of those who had
bought them speculatively for a rise. A
condition such as this proved that the
ground work, at least, had been arranged
for an upward movement In prices. The
report, too, came from every responsible
and Trustworthy source OF a scarcity OF
stocks" in the financial district. Commits
sion houses, large and small. declared that
they were carrying from 80 to 40 per cent.
less stocks than they were in the last week
Of january and that 80 far as they could
see there was abundant foundation for
the question asked so pertinently before
the beginning Of last years great advance
in values; where are the stooks?" Though
the market was still obviously professional
and relatively dull, it yet acted in the way
markets generally do when after a long
fall a e primary advancing tendency
asserts itself. In the curse of a decline
prices at last reach a point where the buy
ing of stocks by investors OF all Glasses on
a scale down" reduces the floating supply
Of securities in the market to a minimum.
Then follows a period when investors.
although not advancing their bids for
stocks, no longer ask for further conces-
sions in prices and take securities at ruling
quotations whenever they are offered.
The market on these occasions becomes
almost %stagnant. Finally, professional spec
ulators discover that prices have touched
bottom and begin to buy tentatively for a
rise. Their buying increases when 1t is
found that stocks rise easily; 80 that prices
are usually we'll above their low points
before conviction that the decline in the
market IL over gets to be general and an
acquisition OF securities for the account Of
commission houses become the feature Of
the trading. Naturally, it ia the profess
sional spectators under such circum-
stances who at the outset reap the largest
profits from the markets advance: but to
this these professionals are clearly entitled
by reason of their ~forethought and sagacity.
They ma Ike a business of speculation. II is
their trade to know when it is the time to
buy the market and when it is time to sell
it, and if they are so constituted that their
experience and watchfulness do not bring
them information about such matters
quicker than to the general public they are
untitled for their occupation.
In explaining the improving tendency
in values one can only recall h~ackneyed
observations concerning the general state
Of business and finance, for there were,
admittedly, no new or surprising develop
ments last week that could account for
the strength Of the market, and, hackneyed
or not, these plain and familiar influences
regarding the current state Of affairs form
the true causes for the better feeling that
exists. The stock market has in the last
two months been talked to death and such
unfavorable factors in it as did exist were
exa ggerated to an extreme degree in mar
ket comment. Even the greater portion Of
commission house literature has been
against the market" and all this ultra
conservatism and repression of speculative
activity was bound sooner or later to bring
about in the market a state OF unusua
residence and elasticity. Again, the money
situation has for several weeks back been
stea Oily easing, and very different views
from those held a short time since are now
entertaining in high banking circles as
to the rates likely to be paid for the use Of
funds during the spring and summer. 1t
was commonly believed in these quarters
in the first month Of the year that time
money would probably command the legal
ma ximum interest rate throughout the year,
II indeed it did not touch a much higher
level. The ~tenacity with which European
money lenders were holding on to their
funds was not liked, the large demands of
money for use in general business were
adverted to and our general credit situation
was thought to be strained. II all these
clouds have not absolutely disappeared,
yet they have done so in great measure,
A cheerful feeling has been dispersed in
every European financial capital by the
certainty that the Moroccan situation
will be agreeably adjusted, and the great
amount OF money held in reserve in Europe
against the possibility Of an unfa vorable
termination of this affair is now seeking an
outlet. Sterling exchange here is CON-
tinually weak, so that gold imports are
from time to time occurring, and while
these imports are, 1t may be, connected
with the transfer Of money to Japan under
the calling in by the Mikado's Government
of a considera BILE portion Of the proceeds
Of loans negotiated in Western countries,
it is yet obvious that our bankers could
easily secure all the European money
they could reasonably wish by slightly
raising their bids for funds. The dreaded
locking up Of money by the banks on ac-
count Of the April disbursements has come,
and at the close Of business to-day, pre-
sumably, will have gone without causing
even a moderate furry in money rates: