New-York tribune., 1907-01-28
THE FINANCIAL MARKETS.
Il WEEK OF LESSENED 4CTIVITY IN STOCKS, WIT.
PRICE TENDENCY DOWNWARD
Flood of Racay Note Issues Outlook for the Continuance
of Prosperity-Money Market Conditions
THE WEEK IN WALL STREET.

Stock Exchange transactions in the week just
ended were only three-quarters as large as in
the preceding week and less than one-half as
large as in the corresponding six days OF 1906.
The curtailment Of activity was accompanied by
a narrowing OF the price range. the market
movement on two three days being without
significance. except perhaps as indicating the
uncertainty of mind of operators to whose vital
interest IL is 10 determine whether advance or
decline is to follow the marking of time" On
the whole, the market trend was downward. al
though the net price changes for the week were
not very large. and the probability is that the
low level has not yet been reached. The banks
last week made further moderate gain Of cash.
and money market rates were distinctly easier.
with call loans placed one day at per cent, the
lowest figure for many weeks. and time money
loaned at rates which. compared with the inter-
est and Commission" for a long period previous
ly asked, appeared actually low. But this less
ening Of the money market stringency, it was
recognized, was not to be regarded an in
vitation TO renewal of stock exchange opera
tions for the rise, for other and urgent uses
were designated for the returning funds. princi-
requirements OF the railways for fresh money.
The growth of the feeling that the trade and In
dustry OF the country are beginning to show a
little relaxation from the high pressure condi-
tions which have prevailed for long is also
acting TO restrict stock market activity as In
the campaigning in many states against corpora
tions. some OF them culpable.
A report that the Secretary of the Treasury
had decided to postpone the time for repayment
by the banks of the S30.000.O00 Of government
deposits lodged with them under the circular of
last September gave a nomentary stimulus to
the market in the middle OF the week. but the
secretary's denial Of any such intention caused
a reaction in stocks and slight hardening of
rates for both call and time money. AS the
case stands, the whole amount may have
to be returned to the Treasury before Secretary
Shaw leaves office. early in March. which may
mean q real stringency in the money market be-
fore that day, as. despite the large stock market
liquidation. each successive weeks bank state
ment shows large increase in the volume Of
loans, and the demands OF the great railway
corporations are far from being satisfied. II is
probable. however, that the Secretary will grant
delay for a few weeks or months. The last
week has witnessed the issuance OF several big
blocks OF notes. the first being the S15.000.OOO
put out by the Southern Railway Company and
three roads Of the Vanderbilt system. That the
New York Central the Lake Shore and the
Michigan Central find it necessary to pay more
than per cent for accommodation in so large
an amount is pretty conclusive proof that
further liquidation in the stock market is 10 be
expected, liquidation which will bring stock
prices down TO a basis where dividend return
will approximate more nearly than at present
the income return from funds invested in short
term obligations Of standard railway systems
To say that business activity is showing indi-
cations OF easing off is far from saying that bad
times in sight. In the opinion of the best
judges Of business conditions IN the United
States the pace which has recently been set
could not for any long period be held. and an
even sounder prosperity would be established
as result Of gradual relaxation of that kill
ing pace. There is no evidence of overproduc-
tiOn in any important industry. least Of all in
the steel trade. where conditions have improved
so greatly in this respect since the United States
Steel Corporation has become the dominating
influence In that industry. and In that fact is
the guarantee that lessening of demand for
product is not 10 be followed by depression, but
rather that the shrinkage Of business will be
moderate. to proportions spelling abundant. but
not exuberant. prosperity. and no longer swamp
ing the facilities Of the common carriers
Everywhere there is confidence in the continu-
ance Of prosperous conditions and in the under
lying sOundness of the business situation, but II
IS nevertheless recognized that the business of
the country has outstripped the growth of the
railways. and that with that expansion and
with prices at their present height a further ad-
vance at present would mean an additional
strain credit which would probably have
disastrous results.
raj lyh 2Fran anerine for b4afV
ing possession Of ample funds for betterment
purposes, and although committed TO the policy
of enlarging their carrying facilities, both in the
way OF trackage and rolling stock, are under
stood to have adopted the general policy Of cur
failing 20 some extent the amount Of cOnstruc-
ton work TO be done and orders to be given for
equipment as cost Of material and wages of
labor are at so high a level that the expenditure
now OF given number OF millions would show
results much less in miles Of new road and in
cars and locomotives and steel bridges than the
same expenditure II made only year ago would
have produced, another consideration with the
railroads being that in many cases they now
must pay much more for money than they were
obliged only few months ago to give. Gross
earnings OF the railways are still showing in
creases. but net earnings shrinking. as the
combined result OF higher wages, higher cost of
material and increased dividend returns TO
stockholders, whose right TO share in the en-
larged earnings OF their properties is without
question suggestion that the railways may
be obliged 10 advance their freight rates has
been heard recently. but it is not generally re-
garded as possible TO be carried into execution.
In view OF the present temper OF the public and
of public authorities throughout the land toward
corporations of this sort.