New-York tribune., 1906-10-15
THE WEEK IN WALL STREET.

and at the moment there is no fndlcatloh OF d
change in the near future favorable to the ad-
vocates Of lower quotations except. perhaps the
usual ante-election break. There were in the last
week healthful reactions In many issues and
tendency among conservative operators 20 check
activity the bull side OF speculation. but there
were no developments that suggested weaken
ing In the fundamental conditions which under
lie securities values. II is contended in many
circles OF the Street that there are too many
encouraging features in the situation 20 repress
speculative activity for any length of time, and
II IS conceivable that before the end OF the year
prices may be carried 10 highly inflated levels.
Notwithstanding the fact that stocks already
are selling on a moderately high basis. The ex-
pectation that there will be further increased
dividends the declaration OF dividends on stocks
which have never been in the dividend column.
and the probability Of valuable rights for the
stockholders Of many companies, naturally IN
duce enthusiasm among holders OF American
investment issues. and doubtless viii attract
further buying on purely speculative account.
Railroad companies are finding that the Rate
bill is working 70 their advantage, while the
same thing may be said regarding the shippers,
and this fact receives important consideration
IN Wall Street centres. where real factors gov
erning stock market values considered.
1t is interesting to note that Wall Street is much
more favorably impressed with the Republican
administration than It was a year ago and
feels uneasiness over the probability OF fur
ther legislation IN Congress affecting corpora
tions, this development OF confidence being based
on the excellent results which have been accom-
pIshed by the laws already enacted governing
Industrial and railway concerns. Since the
low prices recorded in July the average for ac-
tive railroad stocks has advanced 16 points, and
for industrials 10 points, and this advance has
been accompanied by frequent periods Of re-
action which have kept the market in a health
ful position. so that at present there IS tech
nical weakness Of Importance and no Indication
that there will be material declines in the near
future. Indeed with railroad and Industrial earn
tngs constantly increasing and with money rates
easing, It Is not improbable that high record
figures will be recorded in all the active issues
after November g. The only unfavorable feat
at the moment Is the slight increase in fall
ures, brought about IN many cases by defalca-
tions. as instanced last week in the assignment |
OF large local banking and importing house
While domestic monetary conditions show I'm
provement, the position OF foreign money mar
ket affairs Ia far from favorable. reflection Of
which is presented IN an advance by the Bank OF
England and the Imperial Bank Of Germany IN
their loan quotations The Bank Of Germany
placed its rate on 9 per cent basis last week,
while the Bank OF England advanced its mini
mum rate OF discount to per cent, this rate be-
ing the highest since February. 1901. The ao-
ton of the Bank of England IN increasing It's |
discount rate based the reduction in it's |
proportion Of reserve TO liabilities. which now !
stands at 84.47 per cent, against $3.50 per cent |
In the preceding week and 41.47 per cent a year
ago. The falling or IN the banks holdings has |
been due TO the American demand for gold. with !
drawals Of the metal for Egyptian account and !
the increasing demand for mercantile sources |
throughout the British Empire. The higher rates
for money abroad follow cessation Of the |
American inquiry for gold, and conditions n |
Europe are now distinctly unfavorable TO fur !
ther engagements Of the precious metal for our |
account. but fortunately the situation in this |
country is moving in a manner which no longer |
makes necessary assistance from foreign CEN
tres. The needs Of the West practically have !
been satisfied. and the only important shipments /
Of currency now being made from New York are |
for New Orleans where the demand for accom- |
mediation in connection with the financing of 4
the cotton crop Is heavy and likely 70 remain so
for a number OF weeks to come
The Improvement IN local money market con- |
ditions and the higher rates abroad are respon- |
sible for the strength in the foreign exchange |
market. Quotations for demand sterling ad- |
vanced sharply in the last week, placing the /
market on a level which precluded further en-
gagements Of gold for the United States. except (
at a loss. The effect Of the deposit in the New /
York banks of more than $44000,000 public funds |
against engagements of gold for import and OF |
the special temporary government deposits IS |
apparent In the easier tone OF the loan market |
and IN the growing confidence among specula-
tors of further advances in securities values.
The position of the London money market was
indicated in last weeks fortnightIy settlement on
the Stock Exchange in the contango rate OF
American securities, which ruled at 6s1 per
cent and which. incidentally disclosed the fact
that a larger account existed than Wall Street
supposed. At the settlement. loans 10 the
Stock Exchange were made at 515 per cent and
renewals at per cent, these figures being un-
usually heavy for this period Of the year, and
suggesting that London bankers are uneasy over
the immediate future Of the money market.
High rates in London are apt 10 affect the money
markets of the world, and it is not unlikely that
the Bank Of France will increase it's quotations
this week, especially If London is able to shift
the present demand for gold at that centre TO
the French capital The United States has taken
since the San Francisco disaster upward of $780,
100000 gold from Europe. and this loss is one
which must be reckoned with IN making predic-
tions about the probable course OF European
money markets in the next few months. In our
own market while conditions are very much
stronger than they few weeks ago, there
is no reason to suppose that rates for loans win
decline 10 low level in the balance OF the year.
but II is encouraging TO know that the recent re-
taxation IN the market has placed funds
basis which does not involve extreme burden
on the part OF borrowers
Conditions throughout the business world are
satisfactory in most lines and there is no indi-
cation Of an adverse change in the course Of the