Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-02-03

were disposed TO cover their snort con-
tracts. Most Of the losses were recovered
under this process. The tone Of the mar
ket continued feverish up to the closing.
The demand did not follow up the ad-
vances with eagerness, and the market
became duh on the rallies.
No New Developments.
The days news offered no new develop
ments Of Importance. The first selling was
professedly based, to some extent, on the
serious tone Of the public discussion Of
the relations with Japan. An unfavorable
impression was caused by the large growth
In railroad operating expenses shown by
being insufficient in some cases to cause a
decline in the return compared with last
year. A report was current of an intended
increase In freight charges by the trunk
lines in the early future
The reviews of the mercantile agencies
were scanned for signs of any reactionary
tendency in the business world, but none
were reported. Bank ciearings for the week
are lower than last year, following ten
dency manifest for several weeks past
The decrease is accounted for mostly in
the New York figures, and outside the seven
principal cities the clearings still show a
volume well above that of last year. The
bank statement was little regarded. the
cash decrease being smaller than was ex-
pected and the loan increase causing no
surprise in view of yesterdays sale Of New
the week to new stock and note issues.
The Bank Of England was reported to
have secured 100000 Of gold to arrive
from Egypt on Monday. Foreign exchange,
sagging tendency. Importance Is attached
to the attitude to be taken by the Bank Of
England In the event Of further demand on
London for gold by New York. Total sales
Of bonds, par value. 81, 100, 600.
Low Level Reached.
Prices of stocks have receded to a ma
terially lower level this week, breaking
through the previous low level Of the pres
ent decline and falling to near the low level
Of last year for many stocks which was
touched after the disturbance caused by
the San Francisco earthquake. The initiative
for the decline Is generally attributed to at
tack by an organized bear party in the
tensive resources and aggressive and skill
full leadership. The success OF the attack,
however, affords abundant proof of the
vulnerable condition Of the long account.
The fall in prices has brought heavy offer
ings upon the market by the exhaustion Of
margins, uncovering Of stop loss orders and
the usual line Of consequences entatled by
the turn Of the market against an extended
speculative position. The extent Of the long
account and it's lack of strength have
proved a surprise to most observers. Spec
ulative opinion has been much depressed
and disbursement over the maintenance
of the Industrial activity and prosperity Of
the country has been generally expressed
The news Of the week has anorded Few
important developments, but these. with a
common accord. have been Interpreted to
confirm the views Of coming reaction and
business depression. The sending to Con-
gress Of the report OF the interstate COM
merce commission on Its inquiry into the
oil industry fortified the impression made
by the report last week on the eastern coal
CARRYING railroads of the indefinite pros
pect offered Of government activities to
probe the faults and the objections to be
found In the great corporations OF the
country. This was the favorite theme Of
consideration In the stock market.
Shortage Of Capital
The shortage Of capital is accepted as
the main factor In causing the fears OF
business reaction. A suggestion of COM
ing demand for capital has been sufficient
to center the weakness Of the market on
the individual stock concerned. So acute
has become the distaste for new issues that
1t Is believed that railroads are revising
their plans for future expenditures to limit
them to the completion Of projects already
undertaken which must be pushed to COM
pletion to save loss, while new undertake
ings ara postponed to await more favorable
conditions Of the securities market.
To provide for these immediate neces-
stiles temporary notes of the railroad COM
panies on which high interest rates are
paid are the favorite expedients. A good
demand IOr THESE uOteS Is reported, WHICH
Is regarded as a favorable symptom of an
awakening of demand for investment of
capital. But older securities are under
pressure of selling to realize resources to
put into the note issues. and a process Of
price readjustment is going on to bring the
yield of profit on stocks toward the level
of that shown on the high interest-bearing
notes.
Payments Of instalment of new stock
issues already determined on and which
are offered to stockholders at par In con-
trast with the premium of the stocks in
the market have the same effect. The dis
ttnct disfavor toward American securities
attributed to even capitalists is much COM
mented upon as closing the door of pros
poets of relief from that quarter for the
heavy capital requirements which confront
our own financial markets. The extent of
our proposed capital issues in itself seems
to intimidate the European investor, and
the hostile attitude of the public mind to-
ward corporations here IL given as another
ground for the discrimination against
American investments said to be shown by
European capital. With the curtailment Of
proposed outlay by the railroads 1t is fear
ed employment for labor and expenditures
for material will be reduced and markets
be affected in consequence.
Steel's Good Showing.
The brilliant showing presented by the
United States Steel Corporation in it's re-
port for the last quarter of the year failed
apparently, to allay this fear. In spite of
record net earnings for the last quarter
and for the full year and a volume of un-
filled orders on hand far above any pre-
vious record, the publication Of the report
was the signal for heavy selling Of that
stock and of the whole market A consid-
GRAFTON Of the present condition OF the
market must allow for large liquidation