New-York tribune., 1906-07-09
THE FINANCIAL MARKETS.
EARLY WEEK DECLINES IN STOCKS FOLLOWED By
RECOVERIES.
Conditions in Money Sound bat Time Funds Likely Stiff
Level-Trade Situation Sound.
THE WEEK IN WALL STREET.


Liquidation of stocks was heavy in the early
part of last week, while sentiment in speculative
circles was intensely bearish until Friday. when
under the influence OF sharp rally traders ideas
became more optimistic and further improve
ment was predicted The upward movement
was due entirely to the speculative position of
the market which had practically been sold to
standstill. The decline had been under way for
a number Of weeks. and the development of
material advance caused no surprise, though the
absence of an active public demand created
great disappointment. the assumption having
been that on the first appearance Of improve
ment the commission house following would i'm
mediately come into the market. Securities GER
tainly at a much more attractive buying
level than they were a few months ago. yet there
many careful observers who believe that a
further readiustment to a lower level must be
effected before there can be any permanent ad-
vance especially in the case OF the stocks which
are still selling out OF proportion to the price Of
money as compared with investment yield. There
are so many favorable factors in the situation
however that the movement which began Fri
day may run on through the month, particularly
as there no longer is any reason for Wall
Street worry over Congress. to which and the
President large section of the Wall Street COM
munity ascribes its recent speculative losses on
the long side Of the market. Wall Street always
breathes easier when Congress adjourns. but
the conditions which recently prevailed on the
Stock Exchange were due more to a long period
of speculative eXcesses than TO the activity OF
Washington in the matter Of dsciplining corpo-
rations. The President and Congress have done
nothing that ever will injure real investment
values indeed, they have started reforms which
mill 1-orly4o 9Io odx nP he
American investment securities.
Great inherent strength prevails both in the
financial and business situation. Were this not
liquidation and heavy declines in the stock
market would be accompanied by acute disturb
ance among corporations and individuals. In
the long decline which has carried leading stocks
from 10 to 60 points under the high quotations
established last January there has been no indi-
cation OF serious trouble in any quarter. the re-
suits of the movement having fallen on people
VINO have been well able to bear them without
sinking under the burden. The public has had
little interest in speculation in the current year.
and from present signs there is little likelihood
OF much outside participation in Wall Street
trading for some time to come, owing TO the fact
that the public at large has its money we'll en-
ployed in the channels of trade, and also to the
fear that speculative liquidation has not yet run
its course Powerful interests may be able to
bring about higher level without the assist
of the public, and. in view of the easier
conditions in call money and the promising posi-
tion of the crops. efforts doubtless will be made
TO establish quotations at a better range. From
the high figures of the January boom St. Paul
has declined more than 90 points; Northwest, 40;
Lackawanna. GO; Illinois Central. 10; INTERIOR
ough, 80; Missouri Pacific, 10; Atchison, 10; New
York Central. -; Pennsylvania. %; Reading, 10;
Union Pacific. 20; Amagamated. 20; United
States Steel preferred, 13. and Great Northern
20. The high priced issues have suffered more
than the cheap stocks, speculation in the latter
having been comparatively light and con-
sequence the better class Of securities doubtless
will continue to be the active features in the
summer market.
While call funds are weaker, there is no i'm
mediate prospect Of an easy level in the time de-
partment. Time money is firm in response to an
active demand in connection with the country's
growing industries and, with the approach Of
the season when the inquiry for funds incident
TO the gathering and marketing of the crops
Will become heavy q irmer tendency will de-
velop in the general market, though bankers are
not looking forward 10 disturbance, as it is be-
lieved that the drain this centre from the in
terror will be Offset in great part by imports
of gold from Europe. Last week sterling rates
ruled for brief period at level which sug-
gested the development of active movement
OF the precious metal to these shores. and a
small amount was engaged but an advance
toward the close eliminated the possibility of
large shipments at present without the resump-
ton by the Secretary Of the Treasury of the
emergency measure adopted following the San
Francisco earthquake, when government gold
deposited with the banks pending the re-
cept of an equivalent amount from Europe
There is pressing necessity for gold imports
at the moment, and that the Secretary believes
the situation is able to take of itself is
1ected in his withdrawal from national banks
Of $10O00O00. and his offering of $30o00.OO0
Panama Canal bonds This issue promises to
be a great success, and as the bonds may be
used as a basis for banknote circulation a con-
siderable increase may be expected in national
bank notes in the fall, when additional currency
will be needed. The recurring periods of high
money, with the attendant unsettlement of secu-
rites values, to say nothing OF the unfavorabIe
effect the country's business, is a subject
which is now being actively discussed by bank
ers throughout the United States, and the neces-
sity of some reform In our currency laws which
will eliminate the weak features of our currency
system is becoming more apparent every day
AS pointed out by Mr.. Vanderlip last week before
the New York State Bankers convention, our
lawmakers may not realize the dangers which
encompass the nations financial and business
situation in the present currency laws until they
are pressed upon them by some great disaster
10 our prosperity.
AZ the moment the financial and business skies
are clear and promising, but it is conceivable
that a change may come when least expected
and, perhaps. from the direction intimated by
the vice-president of the National City Bank
The Chamber of Commerce of this city, which