New-York tribune., 1906-11-19
THE WEEK IN WALL STREET.

weeks stock market, prices rising under the In
| nuence OF active buying for both accounts in
cluding purchases by the more substantial spec
ulative interests. Sentiment showed decided
| change regarding money market conditions, and
easier tendency IN rates for call loans natu-
rally induced the belief IN commission houses
that the period Of stringency in money WAS over.
for the present at least. though In we'll informed
banking quarters 1t was not thought that ratSa
for funds would rule at cheap level in the rest
Of the year. All conditions III SIsiI.osa ard
financial circles are against the development or
really easy rates for loans in the near future
Some Wall Street operators who have had many
years of experience not inclined TO believe
that the advance in stock market values last
week foreshadowed long period of bull activ-
fly, while. the other hand they do not con-
slider the prospects at all promising for traders
who would like to bring about lower quotations,
their opinion favortng market In which there
will be frequent changes on both sides, but with
no decided tendency IN either direction Though
the sharp advance in the so-called Hill stocks,
ST Paul and the Hartman issues suggested to
many minds the probability OF important devel-
opments in the Northwestern railway situation
there were no facts upon which to base conclu-
sions and no information from official sources
which tended TO confirm the various runors re-
garding the properties. Undoubtedly a large
short interest existed in these stocks, but the
great strength shown by Great Northern. North
ern Pacific Union Pacific and st. Paul undoubt-
edly represented something moro than technical
conditions affecting the securities. Naturally
the strength in these shares was an efrectlve IN
huence in helping prices in other parts of the
list and the general buying was strong enough
TO absorb all offerings and to offset the erect OF
sales which were made on the theory that the
prosecution Of the Standard Oil Company by the
federal government would be followed by acuVe
uouidation on the Stock Exchange. The only
issue affected by the move against the Standard
Oil Company was its own stock. which Is dealt
In only on the curb.
While monetary conditions show Improvement
at some points as compared with few weeks
ago. there is still little chance OF return of a
really easy position in the immediate future II
is not unusual to have high rates for funds in
the last two months Of the year; indeed,
throughout the entire autumn, December and
early January stiff loan quotations have been
common IN the past. as. for instance, last year.
when. It may be recalled, call funds ran from
the first week IN November from 61a per cent
to 110 per cent in the last week In December,
averaging about u per cent, with time money
also firm Twice last season there were deficits
In the bank statement. and reserve in the great
go above 100000 Powerful spectators.
however. were able to hold up the prices OF
stocks, and some Of them believe that they will
be just successful this year. particularly as
last week they advanced quotations. despite the
fact that the bank statement OF Saturday, No
vernber TO- presented a deficit Of more than s.
100000 and the fact that call money ran from
to 20 per cent averaging per cent
Cash holdings are low and ought to be
h,,t yl,o$
quarter may we look for help? The Secretary
of the Treasury has refused to place additional
sums Of government funds in circulation. There
is chance of securing gold abroad. There is
no = Gect Of reaction IN business which
would ( crease the demand for monetary &C
commodation. thus releasing funds now actively
employed in the channels of trade. and there is
little prospect Of return flow OF money be-
tween the present time and the end OF the year
IN volume large enough to add materially to
cash holdings. 1t therefore appears that rela-
lively light cash supplies will prevail at this
centre In the rest Of 1906. but the banks could,
If they so desired. reduce loans TO extent
which would maintain the legal reserve until
large additional supplies of cash might be
cured. There is a large amount of money tied
up in real estate speculation and in the current
mining boom, in addition to that being used in
the oro.nary channels of trade. and when the
time comes for a collapse In real estate and
mining speculation money will be easier
consequence. while whJn general business re-
action develops as a result. perhaps, Of a dis
astrous crop year. money will be very cheap.
But no one at present at least. desires such a
curative process. Some cures are worse than
the disease. and IN the case of the money mar
ket merchants would rather pay high rates and
make reasonable profits than be offered accom-
mediation at almost giving away quotations by
the banks and be unable to take it for lack of
a. demand from consumers or a demand at such
low prices as to reduce the margin of profit to
a minimum.
There will be a tremendous demand for money
| in 1907 unless all current signs fail Already
it is estimated that there are in sight 1000,
| 600 of new capital requirements by the rail-
roads for improvements, extensions and new
! rolling stock in the coming year. The railroads
| purpose TO assume enormous additional obliga-
| tions in the next twelve months on capital ac-
count while they are contracting to pay in
creased dividends to their stockholders and bet
ter wages to their employees. To do this they
count on a indefinite continuance of current
prosperous conditions in this country and on in
| creased gold production. Regarding the latter,
| II is q noteworthy fact that It has not served
10 lower interest rates, inasmuch trade
tivity has rapidly absorbed it. There has been
large expansion IN the amount Of money in
the country in the last year. 1913, ,751 20S; yet
money rates high and likely to remain so
for a long time TO come. The large increases
in wages and the big dividend payments take
cash out Of the banks and little of 1t returns;
hence higher wages and higher dividends do not
serve as a basis Of credit. Credit facilities have
been unduly strained all over the world. but the
danger Of such a situation does not appeal much
| to people when they see trade expanding rap