The Washington herald., 1907-06-30
MARKET IN ADVANCE
Various Causes Assigned for
Existing Conditions.
PRICES HIGHEST OF THE WEEK

turn. Advance Is More Marked and
the Gains Place Many Leading
stocks at Highest Mark for Tive
Understandings Are Gratifying.
New York. June 29.-The advance that
occurred to-day in the price of stocks was
in view Of the news Of the day, and the
known conditions Of the investment mar
ket is only applicable on one Of three
grounds. First. that the market was be-
ing pushed upward by main force by
large financial interests with the idea Of
obtaining a higher level upon which to
Hquidate security holdings; secondly, that
speculative commitments for the decline
in the market at present are in larger vol
ume than has been commonly supposed
and are now In a process Of either yolun-
tary or involuntary retirement, or, thirdly,
that favorable developments are hanging
over the financial situation, of which no
glimmer has yet been allowed TO reach the
outside public.
So far as there may be supposed 10 be
present any demand for securities on the
part Of people who propose to pay for
them outright. such inquiry is, according
70 all information gathered In trust
worthy quarters. practically nonexistent,
and this fact was sufficiently attested by
the fasco that attended the city Of New
Yorks offering yesterday of municipal
stock.
II is true that the argument was heard
to-day in speculative circles that the fail
ure Of the city for the first time in
very long period TO sell its bonds on a
4 per cent basis should not exercise a
depressing effect financially, inasmuch as
it meant that bond houses and others
would not be required for the time being
to raise money to carry the 100000 Of
new securities that the city endeavored 20
SELL but such an inference, Of course,
does not diminish the force Of the con
illusions drawn from the failure of the
offerings as TO the state Of the invest
ment situation.
Surplus Il Small.
Again to-day the weekly return Of the
clearinghouse institutions revealed what
could not be described with justice as
other than a serious condition of local
financial affairs. Although bank loans
decreased during the week S7,Sl3.700 owing
to an excess of credit by trust companies
and other n0nsupporting institutions due
70 the higher range of caIl-m0uey rates,
the holdings Of the banks so fell of as TO
result in q decrease i'm the bank surplus
Of $31l721J. leaving the total surplus at
S7.51g.2 rs. against &2Gz5.7S0 at the same
time in 1906. and at the lowest figure save
one before on record at the time Of the
year
This small bank surplus would not in
itself be Of grave significance We're it
not for the fact that this is the season
when the local bank reserves should be
az almost The highest point Of the year.
The time is less than two months removed
VIXEN our local banks must begin 70 feel
the drain 81 large amounts Of money for
the purpose Of moving the COuntry's crops
Bank reserves will indeed be augmented
in the next few weeks by some receipts
o. money from the interest Of the COun-
try. but 10 appears wholly improbable that
they can be at all REINFORCED by gold
imports. If. indeed. they are not actually
reduced by gold exports. Certainly. on
the face Of things. the financial outlook
for the remainder Of the year is sufficient
TO justify caution In all speculative ven
lures for the rise I'm stocks. and yet. after
the publication Of the bank return to-day
there WIS a rapid upbidding of security
prices, which, coming on top Of the pre-
vious advance during the week. caused
the price If many Of the leading stocks
to stand at large gains. as compared with
those recorded a fortnight ago.
Confidence in Future.
Although the common understanding in
Wall street IS that the recent advance in
stocks has been due TO rather a weak
sort Of speculative buying, and that the
movement has not had the countenance
Of financial powers Of the first rank. there
is no doubt that general confidence in the
financial situation has improved The
truth is that the security market reached
a point some weeks since where It was
sold OUT and probably 'Oversold." as
spectators understand the words.
Those who had made commitments for
the decline saw the chances Of recovering
their stocks at lower quotations in the
near future were becoming slender. and a
portion of these importers. at least have
reduced their outstanding contracts Aside
from the failure Of the New York City
bond sale. the news Of the week was gen
orally encouraging.
Despite the publication Of estimates by
various so-called authorities that the
spring and winter wheat harvests this
year will both be smaller than was pre-
dlcted even a month ago. the prevailing
conviction in the grain trade is that the
crop outlook Is decidedly better than Il
was on June J.
Reports Of railway and industrial earn
ings, as they were received during the
week were highly satisfactory. such as
the AtChisOn's exhibit Of an increase In
net revenues for May of $780, 900. the Rock
Islands net increase in the same period
OF $4,000. the Atoms and Southern rail-
ways also of $4,000 each, and Of the
American Car and Foundry Company's
really sensational yearly statement show
ing q surplus in the years earnings after
paying the dividend on the cOmpany's pre-
fsrred stock of S6.O39.000 equivalent to a
dividend Of over . per cent on the com
mon shares. and Of a total surplus Of
over Si9,000000
No doubt, mixed with all the favorable
differences drawn from such statements
is an idea not very prevalent in the minds
OF investors and financial observers that
all this amount Of business, especially in
the case Of industrial concerns. represents
the execution Of orders placed a long time
ago. and that the outlook for the business
Of next year is not clear
In consequence of the usual financial
preparations incident to the end Of the
half year, call money rose briskly toward
the end of the week, causing in turn very
naturally a cessation Of gold exports, and
there was a quoting down Of foreign po-
itical alarms. A specific reason. how