The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1906-10-21

Better illustration of the interdepen-
dence of the monetary centers Of the
world could scarcely be found than the
action Of the New York stock market
following the increase in the discount
rate of the Bank Of England. No soon
er was the announcement made than
selling of securities began. It was
quite to be supposed that holdings Of
American stocks abroad would come out
in some proportion, as indeed they did.
Hence the obvious play was for quick
break and American Spectators made
haste to get in ahead Of the foreign
selling. >r:,. go = 4. s.
The incident afforded opportunity for
extended and varied comment and was
the basis for theories rather alarming.
The Russian government is closely
linked with France and the financial
affairs Of the two countries are so
united-France carrying the load of
Russian debt--that the recent resigna-
ton of the French cabinet was thought
to be significant, especially as it came
just prior to the, time for payment Of
the interest upon Russian obligations
due Nov. l.. -: : .-r
It suggested that there might have
been some trouble not disclosed. regard
ing these interest payments. This the
extremists magnifed into rumor that
the Russian government would default.
Explanations from Paris in effect that
the designations were due to internal
causes, principally differences as to en-
forcement- of the church laws, had some
effect, and later when it was officially
stated from London that the directors
Of the Bank Of England advanced the
rate to check the. outward flow of gold,
an amount nearly 3equalling $5,000,000
having been drawn out that day for
Egypt, in addition to heavy withdraw
ais previously for America, fear was al
layed, tho a suspicion still remained
that something bad was under the sur
face. It was recalled that some years
ago when the great banking house of
Barring went under because of heavy
commitment in colonial and other re-
mote investment and enterprise, the
financial world knew nothing of it i'm
til the Bank Of gland had first adj
vanced its rate materially, after which
the news came out. i; H@Ai,..
The action Of the stock market was
i the more disturbing to the bulls for
the reason that it is generally expected
| that an influence, for depression is yet
to come on our side that in itself should
case off prices, and in connection with
| the foreign financial uncertainty may,
| if it comes, drive stocks considerably
lower, Notwithstanding they are already
down four and five points from recent
| high figures in Some leading instances
This expected domestic influence on The
bear side is am ante-election scare
which! nearlY 4 every trader is looking
for and which ought to appear little
later inthe month. Some one in author
ity capable. Of handling figures will
need only to show by calculation that
Hearst is going to be elected governor
Of New York state, and the scare vii
be on. The republican managers have
already taken measures to jar then
party members and prevent apathy ant
overconfidence, and it will be surpris
ing if they do not; follow it up. with {
good live scare before election day.
| Meanwhile the bull in stocks mus
stand against, these two principal I'm
certainties-- the, possibility of the de
velopment behind the action of tn
4 Bank Of England Of some financial o
;, political factor not yet disclosed, an
the probability Of an election scare tina
will start liquidation: T. -.
/ So far as the more: distant future i
concerned, everything is fixed up 70
bull market The big men, we ar
told, are going to take hold and pu
prices higher than ever, once Hearst
the disturber, is dead politically. Thes
things do not. always come out quit
as predicted. Sometimes the big me
change their minds and again they ma
| not be right Hearst might even b
elected. But the: view Of the marke
generally accepted at the close yestel
day was that: the decline IS not owe
that an election scare will come an
send prices down again, and that SOM
where down the ladder stocks will +
gathering support and strength for
bull market to-cone after election da;
when with Hearst !. defeated and tt
financial atmosphere again clear, ever:
ona will want to bIY.