The Washington herald., 1907-04-15
DiscOuragedS SpeculatOrsJOin
Old Bear Party.
WHOLE WEEK UNEvENTFUL
Cash Reserves of Bank of England
Increase - German and French
tainty as 10 the Tendency of the
Money Market HurtfuI Factor.

market proper was strictly concerned last
week, ii was characterized by extreme
professionalism, diminishing activity, and,
as must be admitted, "a general tendency
toward lower prices. A certain degree Of
reaction in the market was unquestion-
ably invited by the rapid advance in quo
tations for the leading stocks since the
violent fall only three weeks ago. Specu-
lauve traders last week who were im-
pressed by the decided Improvement in
the money market, and who were in
clined. therefore, TO buy stocks, were nat
uraIly more or less disappointed over the
failure Of the market 10 hold its rise. and
rather commonly disposed, after fighting
the declining movement for one or two
DAYS, TO throw over their recent acauisi-
ti0ns and TO join with the Old-time bear
party who were once more vigorously
rcsuming their attack. Right at the close
Of the week, therefore, a more pessimis-
lie sentiment was undoubtedly present in
Wall Street, as distinguished from the
general financial district, than was the
case a week ago; and yet all this was
due. simply as stated. 90 the fact that
momentarily the stock market had turned
weak
short Interest Is Increased.
tt goes without saving. of course, that
the short interest in the market was
materially increased during the week,
and it would surprise nobody if this in
tevest was forced to cover its commit
meuts at any time in rather hurried
fashion. ii the Bank of England's Teduc-
tion of its discount rate from . to ii5 per
cent be excepted. there Were hardly any
occurrences last week of real financial
Importance. The action OF the directors
OF the Bank of England was "a foregone
conclusion. There We're those who had
hoped that the authorities of the Bank
of England might see their way clear to
make even greater reduction i'm the
discount rate of their institution than
was actually ordered. but the statement
of the condition of the bank published
last week Indicated that those iu control
of the bank could not move So rapidly
at the present time as they would pToba-
bly, like To do toward the much-desired
end of making money easy In the British
capital. The cash reserves of the Bank
of England. although they have Increased
a good deal recently. are still relatively
low for the time of the year, being lower
indeed, than they have been at any cor
responding period. with four exceptions
since the year 1882. The hope is strongly
entertained that from now on the bank
will replenish its reserve more speedily
than it has done in the past since there
is no longer any immediate danger of
gold exports from England to this side
and the bank is gaining money from
@ra. FF l.r.F
lion from South Africa.
Foreign Bank Conditions Better.
Improved conditions are also exhibited
by the Bank Of France and the German
Rcichsbank. No doubt one Of the mat
ters that made for encouragement in
Wall street in the last few days was the
fact that the foreign markets did not ex-
hibit more eNhilarauou than they did
under the reduction of the English bank
rate. The price of consols and of other
investment stocks in London weakened
after the announcement was made, though
it was said that one particular reason for
the fall was the immiueuce of a large
new loan offering by the London County
Council. The local bond market too. dur
ing the week did not display quite rs
much strength as it did "a week before.
A Bood demand was stiH reported among
the leading bond houses for the recent
railway sbUTt-term note issues. but not
quite as high prices were bid for these
notes as there recently We're Exaggerated
reports of the high price that tie Erie
Railroad Company had been forced to
pay for its recent accommodation con-
tribnted somewhat 10 the depressed feel
iuS that was manifest, and although it
lac
iug was over for the time being there
was yet feeling that the renewal by
these railway companies during the year
of various short-tcrm obligations matur-
ing az recurring periods would tend to
exercise an adverse influence upon the
market for listed railway bonds
Jncertain as to Money Market.
Aside from the general and instructive
movement in the direction of realizing
sales which obviously was the chief in
nucnce in producing the weeks decline,
one matter that hurt the market more OF
less was the prevalence of species of
vague doubt as TO whether the current
ease in the money market was likely to be
permanent A good deal of difference Of
opinion was developed on the point. Some
of our best bankers maintained that the
broad tendency of money rates here was
toward a lower level, and they predicted
that per cent rate for time money for
all the longer periods would soon repre-
sent the high price that any lender could
get for funds. They pointed TO the evi-
Gent fact that the Wall street commits
sion houses have practically ceased TO
borrow time money at all, relying on the
cal money market for all the accomro-
dation they wished TO secure. and that as
the railroads had already obtained prac-
tically all the money they desired I'm the
near future, and were even figuring as
lenders of money because of the post
ponement of plans of expenditure pregi-
ously formed, the only serious demand
that continued to be addressed to the
money market was that involved in. the
offerings of commercial paper
Bank Leans Continue Large.
These offerings at current rates. it was
maintained, could be readily absorbed It
was urged. too, that. although there
might be no further large deposits in a
lump sum Of Treasury money in the na-
tonal banks, it was yet clearly the in
tention of the Secretary Of the Treasury
70 deposit currently with the national
banks money paid in to the government
on customs duties, and that for the first
time really in the history of the country
the merchants Of the country were to be
given the use OF all of their own money
1t was maintained in al other quarters
however. that the ease in the money
market was TO a certain extent iuusory.
that is TO say that time money as quoted
only reflected the lack Of demand for
funds of this class from Wall street. and
THAI there were bids in plenty from cor