New-York tribune., 1906-10-20
STOCK MARKET OPERATIONS,

Heavy selling was recorded in yesterdays
stock market and declines were quite extensive
In all the active issues. while throughout the
list general weakness developed. This selling
movement based upon the unexpected ad-
vance in the Bank of England's rate of discount
which induced heavy declines in the London
market and extreme selling pressure for foreign
account on the American exchange sales by
foreign houses being estimated at 1O0O 600 shares
Liquidation for commission house account was
moderately large, and traders took advantage
OF this selling and selling by pools to hammer
prices and in consequence such declines as 21a
We're made IN Amalgamated. AZ in Reading
more than per cent in Union Pacific and some
what lighter losses In Southern Pacific and
united states Steel. All stocks which recently
We're active on the long side of speculation nat
urally suffered in the break and the extreme
weakness in Reading, therefore was not at all
surprising. Doubtless the decline brought out a
large amount Of stock from weak holders and
was transferred to the hands of people better
able to protect 1t in times of trouble and it was
a noteworthy fact that on the decline nnanv of
the best commission houses were buyers to q
large extent. In addition to the uneasiness
caused by the higher discounts abroad an esti-
mated heavy loss by the banks in cash this
week also served to depress speculative senti-
ment' Movements Of values in the afternoon
exhibited little rallying power on the part Of the
active issues, though last quotations generally
We're rract1onally above the lowest of the day.
The underlying strength of the market was re-
hected in the relatively light declines in COM
parison to the Importance Of the days deyelop-
ments. including further strength both in time
and call money. If stocks as a. rule had NOT
been in strong hands a recession In values Of
from TO 10 points undoubtedly would have oc-
Cured.
The advance by the Bank of England in its
minimum rate Of discount to per cent places
the rate on the highest level since the time of
the Barring panic in November. 1890, and follows
an advance on October II of the current month
from to per cent, the latter rate being the
highest since January. 1901 The urgent need
for gold in Canada result of the Ontario
pank failure, the active demand in London for
the metal for Egyptian account and the expec-
tation of Withdrawals for South America to say
nothing OF the possibility of shipments to the
United States, naturally have Influenced the gov
ernors of the British bank to protect their re-
serve as much as possible by advancing the dis
count quotation. In the local market the fall in
exchange and the strength of call money have
encouraged the belief that New York bankers
VIII be able to secure more gold in London, but
with 6 per cent rate at that centre and with
the high price for bar gold. further material
decline must be made in sterling in New York
before will be able to bring in additional
amounts Of the metal Sterling was strong YES
terday.
The fact that the governors OF the Bank of
England did not advance the rate at the regular
meeting on Thursday encouraged the idea that
there might be other influencing factors in the
situation besides the outlook for gold exports and
the announcement that the French Cabinet had
resigned served to accentuate the uneasiness
produced by the advance in the bank rate Bank
reserves in London are low, while the demand for
funds is extremely active, and throughout
Europe the movement Of money indicates a
heavy need for funds and a great scarcitv op
available reserve The shipments of gold from
New York TO Canada have been responsible FOR
an increase in finance bills bought by Canadian
bankers and sold here. The outward movement
of cotton is not in itself sufficient factor To ac
count for the weakness in exchange inasmucb &c
shipments OF the product so far have not been
heavy enough to create large amount Of ex
change. though they have been a contrihuttrg
influence to the downward course Of star,ing
quotations.
Enormous amounts of calls have been sold b,,
London brokers on American stocks principally
United States Steel and Union Pacific and ar
present prices large losses are shown on the ac-
counts or the makers OF the calls. Hence Lon
don brokers' It is said are doing everything IN
their power to depress American prices esne
cially as the calls soon begin to mature Lon
don operators have misjudged this market and
have underestimated it's great intrinsic strength
and in consequence makers of calls on our CO.
curities may be in difficulties unless our market
should go to pieces, of which there does not an
pear to be the slightest chance IT wou,d no,
surprise the best observers to see higher eoures
to-day.