The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-10-21
rINANcIAL AVE- coNMERCTAL.
SATURDAY, Oct. 20.

HgmNY NHlllnR VI ~
the SECURITY market to-day and caused
greater declines in prices than occurred
Yesterday or than had been Witnessed IN
any one days trading for a considersoie
period. The market was, in Fact more
or less demoralized. 1t was the opinion OF
M close watchers Of the course OF the market
both Yesterday and to-day that speculs-
.,ve sellers for the decline have in ms
period taken the utmost advantage possible
OF almost the single opportunity nat mas
been presented to them within many months
Of making a little money. The preeuhp-
tion ia fair. however, that the depression
in the market in the latter part OF the Week
has been DIT ncipally due TO LIQUIDATION
Yesterday and to-day. at least, his llquids-
ton represented in great part the transfer
from the London market To this side OF
accounts open for the rise. such a transfer
was obviously necessitated by the a
vasterday i'm the Bank Of England's discount
rate 10 8 per cent. and by the fact hat IN
the middle of next week occurs the London
fortniRhtIv financial settlement. A Q per
cant. minimum discount rate at the Bank
Of England means probably that the
charges for carrying American stocks in
London during the coming two weeks will
be at a somewhat higher figure. As it
costs much less than his 10 carry cur own
stocks locally a bringing over OF American
stocks from London to this market naturally
follows. The great question thus anectlng
the future OF the market here is the probable
volume of selling which will take place on
our Stock Exchange for London account.
and as, according to the most trustworthy
estimates, fully 1000 % shares OF stock have
thus been sold by London yesterday and
to-day the opinion Of those having access
to the best sources OF information was to-day
that the bulk of this liquidation had been
completed. The reasons which have led
to these developments are now so wholly
matters of common knowledge that IL is
almost unnecessary to refer to them. h
Bank OF England has found the demands
addressed to it for funds greater than its
calculated upon. A 5 per cent.
discount rate by the Bank OF England,
ordered "A week ago, did not serve to check
the drain of money from the British capital,
and so the force Of a Q per cent. rate, one
that is usually considered "a being almost
prohibitive Of speculative buying Of secure
ties in London, has had to be brought into
play. There has been much just criticism Of
the in~eptitude displayed by the directors OF
the Bank Of England in their management
Of financial affairs this fall. They entirely
overestimated the strength OF the position
Of their institution and now, apparently,
are rushing in a more or less frantic III
TO repair their mistake. 1t is to be borne
IN mind. however, that financial necessities
have arisen which could not he included in
any one = foresight a few months ago.
Owing to the violent rise in the price OF
cotton money has had to be sent from
London to Egypt I'M far greater amount
thar is usual at this time OF the year and the
definite cause Of the sensational rise in
the Bank OF EngIand's discount rate on
Friday was due to the knowledge, that
came very suddenly, that more than 81 ,OO0,-
600 would be withdrawn from h Bank
on the succeeding day for shipment to
Egyptian commercial centres. Canadian
institutions turned up, too; with calls on
England for money that were entirely I'M
expected, and ii seems Brazil n Argentina
are also clamoring in London for n
All the foreign markets to-day were de-
&. pressed and our stocks in London at the
opening Of business we're one or two points
below their final quotations here yesterday
The declining movement in this market
proceeded u~ninterruptedly until the close
Of business and was helped materially by
poor bank statement, which, however,
did not take any one by surprise: Bank
loans. owing to the shifting OF credits from
England to this country, increased SIC, 700,
600. The reported loss in cash by the
banks was %, 900, 900. r less than yester.
DAYS forecasts had made out; but this
loss and the increase in loans diminished
the surplus reserve by $500, 900, bringing
the total surplus down to 80, 200. 600. The
bank surplus Is now less than 1t was at Thu
time last year and the year before, but il
still above the customary figure at thi
season. The decline in the price Of ths
principal stocks to-day ran to ~ points
and there were such individual losses as 81
points in Baltimore and Ohio, "a in st
Paul, 8 In Great Northern preferred, b
in Northern Pacific, az in Union PacifI
and 1911 and 8 in Anaconda and Amalga
mated Copper. Since last Tuesday the fal
IN the stocks actively the subject Of specula
ton has reached 81 points. An oversol'
condition of the market, therefore, II thi
tendency is continued very much furthe
Is almost certain to result.
While the potent factor OF the momen
In the market is, as has been stated, seIlinI
for London account. two other matters o
NO less Importance are those relating 10 tn
ability OF purchasers here to take the stock
thus sold and to sources Of outside relief Q
the money market that may still be ap
Piled 10. II would be very strange indee
Q per cent. rate OF the Bank Of Englan
does not induce Paris bankers 70 len
heavily in London. Il has been said, an
truly, that French financial institutions ar
very DESTROYS Of keeping themselves stron
tust now because Of their large holdings c
Russian securities; but financial exigencie
10 Russia are certainly not pressing, an
the French money lenders are, like a
others, anxious TO put u their money o
the best available terms. II was state
to-day in high banking quarters here thS
negotiations for the transfer Of none
from Paris to London were already undc
way and might reach successful conclusio
early next week. As regards condition
IN our own country, it Is tho universal test
mony Of both our large bankers and th
heads Of stock commission houses thi