The Birmingham age-herald., 1907-03-30

cured in London for import to New York
 Further reaction in the money market is looked for during April, and some re- turn for the flow of currency from the interior is expected at an early date. The stock market became quieter with the development of these factors and recov- cred somewhat from the severe depression of the persistent selling pressure upon 1t. The tone continued unsettled and hesi- tating, and opinion over the future of the market was not well enough defined to free the operations in the market from extreme caution. An example of the pre- vailing uncertainty was the reception given to the judicial decision in favor Of the legality of the issue of new Great Northern preferred stock. The stock was rushed up sharply but the rights to sub scribe to the new stock broke badly in the curb market.
 This incident was suggestive of some of the causes back of the present condl- tions in the security market In the speculation of last year a number or stocks were pushed up to unheard of levels on the expectation of rights to subscribe to new stock issues, distribu- tion of bonuses to stockholders, increases in dividends, etc. The rise in the stocks was based on the presumptive value of the rights to subscribe to new issues. At the same time the subscription rights when they came to be quoted were valued according to the high price of the stock with these rights included, and in some cases with expected increases in divi- dend returns to be added.
 The dividend increases when made in creased the demands on net earnings even on the old volume of the stock issues, and the increases in the issues of course brought corresponding increases on de- mands for net earnings if the dividend 1tpc tn he maintained the wbO1a issue. Meantime the steady rise in prices of commodities and labor added constant ly to the growth of operating expenses of railroads, and made inroads on the pro- portion of gross earnings saved for the net return. Some of the new stock is- sues were of prodigious volume and old stockholders committed themselves deeply to secure resources to subscribe to the new stock on the advantageous terms of fered them. This condition had much to do with the disinclination of the dis ability of the usual supporting forces in the market to absorb the usual market offerings which made offerings of stocks when the disposition to liquidate be- came marked. At the same time the money market became involved by the conVergent requirements of great and worldwide activity in trade, and the large demand for subscriptions to new capital issues. The difficulty of the situation was aggravated by the growth Of the public and government determination to control and regulate the powers and actions of corporations. matters becom- ing more acute following the disclosures in the interstate commerce commission in- quiry into the Hartman railroad com bination, and by the concerted outgiv- ings of railroad officials which followed tho Investigation. and actively fostered the feeling of alarm.
 The extent of the liquidation and the sources from which it came, are so far mysteries, and keep alive a feeling of anxiety. The tangled conditions which prompted it, however, are coming to be better recognized. How far the great shrinkage in values, and the basis of credits may affect the general credit and trade situation, remains to be determined and offers the problem on which the fu- ture of the market is expected to shape itself
 The problem is complicated by the ques- ton how far the action of the mar ket has already discounted or over-dis- counted the unfavorable consequences vet to be faced.
 Bonds have shown some belated effect of the movement of liquidation in the stock market.
 United States bonds were unchanged on call during the week.