The Washington herald., 1907-06-29
WEAKNESS At CLOSE
Market Greatly Influenced
by City Bond Offer.
BANKERS DECLINE TO INVEST
Belief Is General that Per Cent
Basis Is Not Profitable, Consider
ing Opportunities in Other High
grade Observation-Disclosures Gaines
Are Lost Upon Failure of Issue.

New York. June 2-While il is impos-
sible to trace in its exactness the extent
of the influence as a stock market factor
OF the impression that gained so strong
a hold during the week in speculative cir
cles that the city Of New Yorks 2900).000
bond sale to-day would mark the turn
ing of the tide" in the investment mar
ket. it is yet clear from the amount Of
talk devoted to the subject in commissisn
houses that the matter PLAYED no incon-
siderable part in the markets general up
ward movement
Wall streets general reasoning in re-
gard 20 il was typical OF the attitude that
is so often adopted by the speculative
community on such occasions. It was
held that large financial interests could
not afford in The present situation to
Let the city of New York per cent bonds
sell for less than par It is Of course,
very well known that the quotation for
our city's municipal stock has long been
regarded as the most accurate barometer
there is of the state Of the Investment
market
For such a purpose the price Of these
bonds is q more valuable index than that
of government securities. since the status
of the latter has become entirely isolated,
OWNS 10 their use as q basis for national
bank note circulation. 1t developed to-
day. however. that despite whatever I'M
favorable inference might or might not
De drawn from their action, bankers
did not propose to buy SO 0J00J0 worth of
new bonds upon a per cent basis when
the ruling rate for other than high-grade
securities was greatly above this.
Result Not Unexpected.
IN spite of his assurance to the con-
trary. Comptroller Metz could hardly
have had any idea that the city's offer
ing Of per cents to-day would go at
par. although he was, Of course, bound
10 make the offering and let the result
speak for itself.
OF the bonds offered to-day only a
uiatuE quantity were. taken, and these
at bids much lower than those made AT
the time of the last offering in February.
Presumably the city officials would not
wait for On improvement in the general
bond markets. but endedyor to make the
best terms they can for the receipt of
money from banking syndicates. Among
bankers to-day there were few who could
be found who were willing TO express an
opinion that an Offering Of City of New
York bonds at 90 or less than 40 per
cent basis would meet with success.
Desirable as IL may be % let il be
thought that the present scarcity OF
money in the country FOR investment
purposes is over, there is frank recoEni
ti9n in the banking community Of the iact
that all Fictitious offers designed toward
this end VIII he useless, and that the hes,
thing FOR everybody concerned is a
straightforward facing Of the situation.
The stock market to-day was Uniform
y strong Up 10 the last hour of the after
noon, when an official statement as 20
the results of the bond sales was forth
coming. After this the market declined
So that nearly all the earlier gains were
lost in the active stocks.
Prices were sustained previously, IL
seemed, by the persistent idea that the
sale would pass satisfactorily despite the
open denial Of any intention TO subscribe
for the securities that was made az all by
the large banking institutions and bond
houses. The truth about the stock mar
ket during lhe week thus far is undOubt-
edly that q g0odly number Of spectators
having commitments for the decline have
thought # best FOR a great variety Of rea-
sons to close their accounts Of this ma
tUre.
Condition Is Satisfactory.
The strength Of the market to-day. in
the face Of the stand taken regarding the
city bonds by financial interests Of The
first rank. was really capable of eXplana-
ton I'm no other way.
Cal money rates to-day rose at one time
20 Y per cent, and the greater part Of the
money lent during the day was put ont
above per cent. development that
would in itself have excited no surprise
In view Of the imminence of the end OF
the half year.
But the estimates Of the transfers OF
cash during the week were that enough
money had been lost by the clearing
house institutions TO wipe ont the surplus
reserve exhibited last Saturday. and IT
was well realized Furthermore that last
Saturdays showing was mr7h more
favorable than the facts warranted. l.
may possibly be found. however. to-mor-
row, as It was n week ago. that the bank