The San Francisco call., 1907-02-27
THE FINANCIAL SITUATION
Why the New York Stock Market Con
tfnues to Decline


tfnues to Decline
The New York circular OF Henry
Clews says:
We have had another week Of irregulsrity and
weakness on the Stock Exchange LdQuidatlon
was renewed q quiet and persistent scare,
which encouraged depression and more OF less
disturbed general confidence At the momeut
the greatest element OF weakness IS the eonth-
ued issue OF short term railroad notes on an IN
precedented scale Since the first OF the year
fuilr $500 900 900 OF new securities have been
authorized Of which more than SZOoVVoVOV
represented short term obigstions-chlehy ran
are 70 be classed desirable investments, ana
especially attractive account OF the hlgh rates
these notes in such amazing sums emphasizes
unusual financial conditions. The requirements
of the railroads are urgent ana must ee ~ ssLIs
fed, while conditions in the security ano money
markets are obviously unfavorable TO the mar
keting Of new issues. Had IL not been that
very considerable portion OF Ine EsllIoaa notes s
has been successfully placed abroad, the market
here would have suffered stfl greater depression
our bond market is already glutted and weak
Las taken liberal amounts OF these lew seelFl-
ties, thus averting dangerous strain upon Ine
local money market at critical period and also
materially strengthening the probability OF gola
imports-to say nothing Of providing our ran
rosos with funds TO carry our mucn neeoeo IN
TIE OUTLOOK
The outlook FOR the money market continues
perpiexing Local bank reserves ought to have
risen materially at this period: instead they
cor t5uue fsr below the average OF previous years
st this season. This is Disappointing Accord
ing 10 the last reports Of the national banks
in the United States the loans stood on January
2eth ct the high figure of 81, 4,463, ,0oo. coo, an
increase OF SSs<,VOO'VyV over ne seoie s.ie @ 80
year. Furthermore, loans at that GATE were
nearly $3.50. .O0o. 0Oo IL excess OF deposits, com
pared with an excess Of only $17.Ooo,ooo year
aEo- glance at me local pank statement
shows that New York is being largely financed
by interior and European bankers, local re-
sources having been long ago exhausted Very
usual spring demands FOR money, which fire.
qYeurlv cause more or less pressure on this
market. In this connection IL Is important to
consider the prospects Of foreign assistance In
other words, shall we be able 70 import gold
ports Of merchandise were valued at $126. ooo.
coo, or $50. 900. 600 more than a year ago Our
January exports Of merchandise amounted 10
Sl69 O00, 600. an increase OF nearly $4,000. 600
over the same month last year. The net result
Of these movements was TO leave a surplus Of
exports amounting 10 over $1,000, 600 this year,
against an excess OF So. .Ooo, 900 last year.
This Is not an unsatisfactory result, consider
ing that the conditions here have been favorable
n expansion Of imports and contraction of eK-
ports.
AMERICAN SECURITIES ABROAD
potent element just now, however, in the
International movement is the placing Of Ameri-
can securities abroad. AS said above, Europe
has been taking some OF our new issues quite
freely and promises 70 so continue, If these
enough TO overcome foreign pTejudices These
operations place US in q much better position
~ ~ Cors-4enc kVlu IA tDs open nerket aoroeo
There Is strong opposition, particularly in Lon
don, against American demands; but American
control over the foreign markets is stronger
than ever before IN history. and II Is pretty
certain that when gold is wanted, shall be
found both willing and able TO pay the rates
demanded. The Bank Of England is In an
exceptionally strong position and does not need
any addition TO its own gold supplies and
should exert little more than q moral innu-
ence against the movement this wsy. The ont
look, therefore. is that IN case of further
stringeDcy or distress at this point we shall
be able to secure a fair degree of relief bv
drawing gold from the open markets abroad