The Washington herald., 1907-03-23
MARKET IN REACTION
Prices Again Go Tumbling
to New Low Level.
LONDON AND CONTINENT WEAK
Action of Bank of France in Advane-
ing Discount Rate Believed TO Have
and Refining shows Striking Up
ward Movement al the start.

New York. March 22.-For the second
time since the sensational break in
prices week ago, the stock market to-
day experienced a severe reaction which,
although it still left quotations for the
standard shares considerably above the
low point touched by them on March II,
brought them lower than they have been
at any time since that day and also car
ried some of the leading stocks down far
ther than it did even during the panic
period. There was the usunl difference
OF opinion to-day as TO whether the sell
ing movement originated with the very
powerful bear" party. now active in the
market, or whether it was in response
merely TO the recurring uneasiness in
financial circles caused by the advance
IN the Bank of Frances discount rate.
and by the sweeping retrenehment OF ex-
penditures ordered by the directors Of the
Erie Railroad Company, as announced
yesterday Most unprejudiced observers
were Inclined to the view that the cause
first stated was that which was chiefly
responsible
The action of the directors of the Bank
Ting to-day In the European markets
than it was yesterday. especially in view
of the fact that, in London. the fortnight
ly financial settlement is approaching;
that an advance in the discount rate OF
the German Reich Bank is feared. and
that there are some indications that our
bankers have deeided to take gold next
week from the London market.
London Is Weak.
Weakness generally prevailed on the
London Stock Exchange and the conti-
mental bourses, la the early part of the
day. and American stocks were quoted at
general declines before spectators here
We're enabled TO trade in the home mar
ket.
AT first, prices of stocks were not
greatly depressed and the market was
sustained for a time by a striking up
ward movement in the American Smelling
and Refining common shares. in which a
rather vulnerable and lately created short
interest appeared TO be disclosed. In a
few moments, however the market weak
ened under heavy selling Of Erie COM
mon, first preferred, and second preferred
shares. which in a comparatively short
time depressed the price of all these is
sues TO the lowest point recorded for them
in several years, and although the activ-
ity of the market ceased somewhat. the
weakness continued and was decidedly ac-
centuated in The closing hour OF the stock
exchange session. The feature of the de-
preston in the last hour was a violent
break in Canadian Pacific stock this
stock. in common with the Erie issues and
Dol
making a new low record for the year.
No Good Reason for Decline.
No especial reason for the decline in
this stock appeared, except the one that
has all along existed, namely. that Cana
dian Pacific stock is still relatively high
priced in the market and is thus a promi-
nent target for the attack Of spectators
for the fall. All the leading stocks to-day
closed at declines of from TO 5 points
Ii was commonly said to-day that the
real reason for the onslaught upon values
Ayas a desire on the part of those hostile
20 the market to make as weak as pos
sble those stocks that il is known are
largely held abroad. An assertion fire.
Quently heard at the moment is that
the speculative position now is really
weaker in London and Berlin than il is
here, and that some such liquidation in
those markets as has here occurred is
inevitable; and it must be admitted that
with all the boasted strength of the Lon
don market, mary more financial fail
Ures have recently occurred in Great
Britain as a result Of stOck-market
troubles than in our own country.
Bears start Erie RumOrs.
As much capital as possible was made
to-day by those extending their commit
ments for the decline out of the news of
the Erie Railroads proposed economies,
and a strongaefforJ as could be was made
by them 20 convey the impression that
the dividends on the Erie's preferred
shares were imperiled The Northern
Pacific and Great Northern preferred
stocks were also particularly singled out
for the selling, and the Tumor was set
a1oat that the Great Northern Company
mcditated the issue of quantity of short
tcrm notes in case permission was de-
nied by the courts of Minnesota to in
crease its capitalization to the extent that
the company is seeking to do. Another
st3ck that nearly was the subject of
more or less pressure was Baltimore and
Ohio common. the preteXt here being the
unfavorabie earnings statement recently
ISSUED by the Baltimore and Ohio, show
ing a net decrease of $411. 900 in the COM
panys net earnings for February, and a
net decrease of S104,00O for the eight
months of the fiscal year TO date.
Cali Money Rates HigheF.
Both call and time money rates were
a little higher than they recently have
been, and sterling exchange was also
stronger; all these advances being the
results. presumably. Of the rather hrmer
tone in money generally In all the worlds
financial centers, caused by the rise in
the Bank of Frances discount rate
Indications for to-morrows bank state
ment were, on the other hand, decidedly
cheering They were 30 the effect that
The banks had gained in cash between
S6'boO,000 and s6.500000 during the week.
owing, Of course. TO the recent fiow of
funds here. attracted by the stiffness Of
money rates, the necessity of increasing
speculative margins, and IN consequ
OF investment purchases of stocks. It
IS expected. too. that the stock market
liquidation Of the last week will be more
fully shown IN tomorrow bank return
than il was a week ago. A decided en-
largement OF the bank surplus is. there
fore, generally anticipated