New-York tribune., 1906-10-22
THE WEEK IN WALL STREET.


trading. The Illinois Central controversy the
convictions In the rebate cases of the Standard
Oil Company and the New York Central. the
higher Amalgamated Copper dividend and even
the political situation gave way as market rae
tors to the developments in money, especially at
the end of the week when il became known that
the Bank of England had raised its minimum
discount rate to per cent Speculative lqul-
daton and declines followed this announcement;
yet the losses made were not heavy, in view or
recent advances, and the general course OF the
market throughout the week, despite monetary
conditions at home and abroad. moved IN a man
that doubtless caused confidence In the SIT
uation among holders of American investments
And in this connection it is we'll 10 note the
fact that throughout the entire season OF hleh
rates for funds our securities markets have held
remarkably firm thereby attesting the strength
of underlying conditions. rejecting the great
stability Of present industrial prosperity and in
dicating that stocks in the hands of capital
lists rather than controlled by weak speculative
interests. All of Europe-that is, speculative
Europe-practically is short of American issues.
having placed faith in the genuineness Of
our business expansion and no confidence in the
ability of the stock market recently to advance
in the face of high money. Unfortunately for
conditions have proved unwse and unfounded,
and hard days may be ahead for the foreign
makers Of calls and sellers Of options on AIneri
can securities at prices under present market
figures These calls falling DUE and London
brokers will lose heavily unless our market goes
to pieces. There is no reason to suppose that
this market will collapse. There IS no reason
why It should.
At this period there is, Of course, reason for
caution in the purchase Of securities. and intend
ing buyers will do well to stay out of the mar
ket. but there is nothing in the money market
situation which warrants the sale OF investment
holdings, except in cases where holders would
rather use their funds in the loan market in the
expectation OF buying their stocks back at
cheaper prices. Money market conditions at the
moment not favorable to active bull specula-
tion and there is reason TO suppose that we are
soon TO the development of a long period OF
easy rates for loans especially in view of the po-
sition of monetary affairs abroad The demand
for accommodation in all parts Of the country
is extremely heavy. and the inquiry from New
Orleans in connection with the financing Of the
cotton crop has not yet been satisfied. Later on
IN the year there doubtless will be return flow Of
currency to the East. though the extreme ac-
tivity in all lines OF trade may be effective in
lessening the shipments of funds TO New York
at the time Of the regular return movement
While easier tendency developed in sterling
exchange early last week. there not large
enough increase in the supply of cotton bills to
account for the downward movement, the weak
ness apparently being due, in great part to the
higher rate for call money and the selling of
finance bills for Canadian account in connection
with the withdrawal Of gold from New York. in
cident to the bank trouble in Canada. Canadian
banks can draw gold from this centre by calling
in loans and converting their cash into gold or by
drawing finance bills on London and purchasing
gold with the proceeds Of these bills. The ship
ments OF gold from New York to Canada induced
the belief that local bankers would endeavor to
secure further sums Of the precious metal in
London to offset the Canadian Withdrawals, and
probably IN expectation Of that and OF the
Egyptian demand the Bank Of England took the
unusual action of raising it's discount rate to &
per cent.
On October II the Bank of England advanced
It's rate to 8 per cent which was the highest
rate since January, 1901, and the latest advance
placed the rate higher than at any time since
November. 1890. In that month the Bank rate
was advanced to per cent on the day Of the
week which the Bank directors practically
never take action, and this movement preceded
the failure of Barring Brothers, which caused
such tremendous disturbance IN all capitals
Money market conditions abroad are distinctly
unfavorable and the effect cannot help but be
felt TO extent in the market IN this country,
especially If a tremendous bull speculation
should develop The demand abroad for cotton
and breadstuffs is active, and, fortunately, the
United States has been able to reduce its oblfga-
tions in the foreign f1pancial centres by heavy
exports of cotton. grain and manufactures, and
In some circles it is thought that Europe is now
actually in debt to us. At any rate. it is a
noteworthy this country Ia heen in
absolute control of the international exchange
market for several months and has been the
chief influence in compelling the Bank OF Eng
land to raise its discount rate to 6 per cent
The spectacle is presented of the biggest money
institution in the world protecting itself against
its borrowers, and, even assuming that our gold
imports have been in the nature Of loans. it is
interesting to know that this country has been
able to force gold from Europe against Europe's
wishes Borrowers are mighty powerful when
they can compel lenders to let them have ac-
commodation which the lenders do not care to
provide. Through the intelligence of New York
bankers and through the assistance received
from the Secretary Of the Treasury, the financial
situation IN New York has been handled that
acute disturbance has been prevented
In all parts of the country the volume of trade
is extremely heavy, and at the moment the only
unfavorable factor is the sign OF some unrest in
certain labor circles. The threatened tie-up on
the ferry services of the leading railroads with
terminals the North River. the demands for
advances OF wages in several iron and steel
manufacturing plants in the Pittsburg region
the notice from Chicago departrleN store driv-
ers that they would ask for an advance of pay on
November J. the streetcar strikes in some Of the
Southern cities and the dissatisfaction which
prevails at some points along the Pacific Coast