New-York tribune., 1907-09-02
THE WEEK IN WALL STREET.

The month OF August mas Deen d peI4ou u
tribulation for the stock market, but the skies
seem much clearer as September opens and the
summer ends The change in sentiment reaIy
occurred a week ago, with the announcement by
the Secretary of the Treasury Of his new pIah
for relieving the crop moving strain on the
money market by making deposits weekly our
ing the weeks when money was most urgently
needed instead of pouring great sum into the
money market when it had reached the eXhauS-
ton point as has heretofore been the treasury
practice. with the unfortunate effect OF creating
artificial stimulus for bull market in stocks
The excellent influence of the Secretary's course
has continued during the last week to De a
potent factor in quieting apprehensionS OF serl-
Gus money market disturbance this MONTH hut
other developments also have contributed TO the
decided Improvement which has manifested
itself in market sentiment and IN advancing
prices some OF these developments, however
being direct or indirect consequences OF the he"
Treasury policy
one of them. and a highly important one, has
been the virtual establishment as certainty OF
the success of the $40,O00,0o0 loan to De placed
by the City Of New York. strong banking inter
ests having co-operated in the purpose of max
ing bids which will enable the city to dispose
OF its entire offering and to put itself once more
in a position to meet in money all demands Oh
its creditors. II is not unreasonable TO say
however that the bankers would probably not
have decided TO take the risk of bidding for this
very large issue of bonds had ii not been for the
knowledge that through the new Treasury po1cy
the acuteness of the money market stTlngency
which always occurs in the fall would this sea-
son be much lessened, and except for the I'M
Drovement in the financial markets abroad,
which itself il some measure reflected the favor
able judgment of foreign financiers on Secretary
CoTtelyous move.
damage ruulors which may be looked for III IN
creasing number and seriousness during the next
three or four weeks. Up TO the present, though
the crops appear TO be in very fair conutlon,
and the outlook is for harvests of at least aver
age size, although the bacllwardness of the sea-
son increases the danger of damage from frostr
especially to corn. as well as postponlng the
date of the period of heaviest demand for money
from the interior. But. owing to the crop short
ages in other grain producing countries. q large
demand exists this season in Europe for the
wheat and the corn Of the United States, and the
supply of that demand will greatly increase
American credits abroad. So certain Is 1t that
the export movement, which is already assurl-
ing large proportions, will in the aggregate he
very heavy that bankers bills in anticipation OF
grain shipments are now being extensively
drawn on London, the acceptance of which lends
added assurance to the belief that the money
market is not this fall to suffer season OF eN-
treTne strain.
The foreign exchange market, which ten days
ago was strong as TO arouse fears OF gold eX-
ports. has since then steadily declined under the
pressure of abundant supply of grain bills
and finance bills the demand sterling rate. which
at that time 4.S715, having fallen by last
Saturday TO 4.S625, level under the par Of eX-
change and therefore nearer the import than the
export point There were two shipments OF
gold aggregating 1000 900, to Europe, but these
were special transactions. the Consignmcnts be-
ing believed in usually well Informed
quarters TO be destined ultimately for Egypt,
and nearly s., ,0o0, 900 sent in gold coin TO
Canada. where it was urgently needed as re-
suit Of the general business activity and the crop
moving calls in the Dominion. the Canadian
banks not being able to obtain assistance in
time of stress from the government, which car
ries all OF its funds on d.
Call money hardened a little as the end of the
week approached was natural in view OF the
fact that the lending institutions were making
their usual preparations for meeting the large
interest and dividend disbursements due at the
beginning of the new month Time money rates,
for the first time in many weeks, showed de-
clining tendency. The bank statement made
not unfavorable showing, with its decrease of
81 651 900 in cash. figure close to the prellnin-
ary estimate and the decrease of $166.600 in
loans and s1.727,8O0 in deposits. The decrease
in cash, which was due chiefly to the loss Of
gold, as already noted, was the principal cause
of the shrinkage of SI,219,950 in the surplus re-
serve, which brought down to $6,156,450
But that total seems entirely encouraging, when
comparison is made with the situation year
ago. when the surplus reserve stood at only s.
s69 400, at the close of week in which the call
money rate had touched 40 per cent and the Sec
retary Of the Treasury offering special faciI-
tiles 10 bring about the Importation of gold.
One of the occurrences of the week which ere
ated a generally unpleasant impression in the
financial district. did the reduction in the pre-
ceding week of the dividend Southern Rail-
way preferred, instead Of its passage. was the
decision OF the Erie directors to pay the divi-
dends the first and second preferred issues in
scrip, interest bearing and redeemable after ten
years. The unofficial reply Of the directors to
the many criticisms Of their action that
they were simply borrowing the amount OF the
dividends from their stockholders at a lower rate
Of interest than that which they would have had
to pay for accommodation in the open market
But that explanation not regarded in con-
servative quarters as satisfactory, the opinion
being strongly expressed that the dividends
are not cumulative and the reasons which
made il desirable UP to three years ago that
dividends the first preferred should be paid.
If possible, were no longer operative, the voting
trust having been dissolved, the dividends
both classes should have been passed In view of
the heavy requirements Of the system for
capital and its far from high credit, instead OF
being made continuing obligations on the COM
pany.
Prices made a fair recovery In the last week.
the bears covering largely the better money
outlook and their realization of the obviously
oversold state of the market, and a continued
investment demand important In the aggregate.
although made up of great many small pur-
chases, being an appreciable factor in the ad-
vance Rumors of failure. remarkable for their
wide range and their reckless character
circulated in the early part of the week. most
of them being believed TO have had their origin
In the fertile brains Of unscrUpulous operators
for the fall, but none OF these reports material
lied and the cloud, day thick. vanished
the next day.