The sun. [volume] (New York [N.Y.]) 1833-1916, 1907-06-16
eoasrP 81 AL sTRgRr.

NV
Paris BouTsS and % selling fof Paris account
on every exchange Of the world on which
stocks held speoulatively In France were
dealt In. and the reports from 81. Petersburg
that the Duma would be dissolved before
night made it inevitable that prices should
decline on the New York Stock Exchange
yesterday. Everywhere IL was admitted
that the foreign news was of prime impor-
lance. and the general disposition was 70
regand the Russian situation as q serious
menace. The unfavorable features In the
situation at home were disreRa rded-as the
favorable ones had been for days pastAand
Europesnaffairs dominated what little Interest
was taken In the local securities market.
Al first the traders seemed undecided what
10 do in the market. Some Of them covered
a part of their shorNlines in the first hour
and then for a time appeared TO be al at sea
as to what should be their next course OF
action. they quickly made up their minds,
however. when 4 report reached the Street,
that the dissolution OF the Russian Duma
was imminent. The immediate dissolution
! Of the Duma. they said. meant a bloody Sun
day. and a bloody Sunday would probably
be followed by a black Monday-and so they
sold the market short without further hesi-
tstion. OF course It was a wholly professional
game. where the players were willing 70 STAKE
/ something. even when they had no means Of
ascertaining the exact facts, because they
felt reasonably certain that II their antict-
pations proved to be wrong their punish
ment would not be severe. The entire lack
Of interest on the bull side gave the bears
a sense OF security, and some of the traders
had no hesitation In saying that even II every
thing In Russia passed of smoothly there
would he no force on the side Of rising prices
s~uf1cient 70 make 1t dificult for the shorts
TO get back the stocks they had sold.
A rather unfa vorable fnotor was the with
drawall of e225. 900 from the Bank OF En- gland
for export TO Egypt at a season OF the year
when the movement ought to be the other
way, the unusual demand from that quarter
being the result OF the failure at Alexandria
and the disturbed financial situation which
that had produced. The Egyptians have
been rather heavily immersed In speculation
and the rumors Of further troubles to come
we're not wholly discrodited mere or on tine
other side OF the Atlantic. There have been
times when speculation by Egyptians has
made it's influence quite deeply felt on the
/ New York Cotton Exchange, but In the pres
ent Instance the stocks OF home companies
have been the subjects ,of the speculative
operations that have disturbed the financial
situation In the northeastern section Of
Africa.
Bearing upon the demand from Paris for
gold, the reduction In the gold holdings OF
the Bank OF France as compared with last
year at this time Ia regarded with interest.
The amount OF gold held by the bank at the
end Of the last week was Gioe. oes $50. against
siI7.677. 761 at the corresponding time last
year. the difference being equivalent TO about
S45, 900. 900. The Bank of Russia has largely
increased it's holdings OF gold and the Bank
Of Italy has made a considerable gain. but in
the other countries no very notable change
are shown. Some bankers think the increase
In the gold holding &c Of the Bank Of Russia is
significant as an indication that preparations
have been made to meet unusual contin gen.
cies.
Union Pacific and Reading were the par
ticular points OF interest In yesterdays trad
ing. and while neither went quite as low as
its o west level of the preceding day both
at the close we're so little above the low est
quotations OF the week that II looked as IL
the insiders must have soon lent support
again or allowed the stocks TO drop lower
than before had not the closing hour inter
vened TO cut short the bearish operations.
In the first hour or so there was a report that
some OF the largest and most active traders
were testing the market for these two stocks
10 see II It would not be possible to make
them the leaders in a rally of some proper
tions, but judging from the results on the
tape IL looked as IL the test only induced the
trading element to return TO the short side.
Not every stock Jared as we'll as Union
Pacific and Reading in retaining a fractional
part of its rally from the lowest point on
Friday, for there were a lumber that de-
clined to a lower level than they had before
reached during the week and closed at prac-
tically the low est figures. Some Of the weak
est stocks were inactive issues, and indeed,
outside the few In which the traders have
been keeping up some semblance OF activity.
there was very little market.
Tho he nh sta lam ant xrne m - thar ooioriaaa
document. and while its publication was
followed by an increase in the volume Of
selling orders this did not result directly
from anything in the figures, but merely
meant that the bears felt more at ease In SELL
ing on account Of the foreign situa ton when
they found that there was nothing in the
local money situation TO prove an obstacle
TO the success Of their operations.
In only one stock. Reading, did the trans
actions exceed &C, 900 shs res- and Reading is
only half stock.
Continuing its discussion, started a week
ago, Of the error made by bankers as to what
rate OF interest on bonds would attract the
public, the weekly letter OF a conservative
house says: we believe the cause Of that
error was that the effect Of the cheaper pro-
duction OF gold vas not grasped, owing partly
to a confusion between two meanings Of the
word money. Money Ia generally used as
about equivalent in meaning TO capital. but
in its more accurate sense It means merely
the medium Of exchange or measure OF value.
II then gold is the money standard and the
cost Of producing gold falls the result is that
the value OF commodities Tor of undertakings
that represent accumulated work. becomes
nominally greater. The amount Of labor
represented by a gold dollar has declined and
therefore IL requires a greater number OF
gold dollars to equal the labor cost Of other
things. This does not apply TO securities
yielding a fixed income In gold. VGcept 80 far
as this income Is seen to AFFORD less purchas-
Ing power. The public do not consciously
reason thus, but we believe they do II uncon-
sciously. When the fall in the cost Of pro-
ducing gold stops the above reasoning, II
correct. shows thai the effect on prices of
bonds will soon stop and we shall be left with
the fact that the stocks OF undertakings
representing work done will be worth more
quoted in gold unless the cost OF producing
gold should rise A Raln. which In imnrohab ia -