The sun., 1907-03-16
FINANcTAL ANp coMMERcIAL.
FRIpAY. March Il

slueratlOnB. Inc perlOO OF acute eAClts-
ment in the market does not usually last
more than three days There is in the
first place a break in prices, either entirely
unexpected or more or less foreshadowed,
as the case may be. followed. as a rule.
ON the second day OF the Oommotion by
extreme demoralizs tioi, when the panic
reaches its height The selling of stocks
often runs into the third day. so that some
times the low prices are then seen; hut
generally not later than this a violent re-
covery sets in, caused by a covering" OF
stocks by the short interest, as hastily con-
Quoted as was the previous liquidation, by
buying by small investors whose attention
has been attracted by the low levels re-
corded and by support extended to the
market by banking powers and capitalists
Of the first rank, usually in pursuance OF a
concentrated purpose to stop the decline,
Often. too. either announcements OF
favorable financial nature are made or the
evil development that caused the break
becomes public so that il is realized that
whatever blow the market was 10 receive
has already been dealt. This recovery in
prices often takes place with great quick
ness and not infrequently retraces half way
the path taken by the previous decline
When il ceases the market is very apt TO
become dull and to begin a slowly sagging
movement, in the course OF which prices
fall almost il not fully as low as they did
during the panic. The procedure thus out
lined is necessarily of vague and general
character but it is easy to understand the
broad force OF the reasons that caused 1t
TO be followed The residence Of the mar
ket after such an extreme exertion OF pres
sure against il is wholly natural, and SINH
larly after the rebound there is no difficulty
in understanding why stock should again
recede Values become deprived of the
support of the short interest. Speculators
and commission houses are weary OF what
they have gone through and there is
tendency on their part TO sell stocks and
abandon the market upon the favorable
opportunity thus presented. There IL
good deal OF necessary liquidation for the
account Of those who have been carried
over" the difficulty, and as the market
moves once more to a level considerably
hi CHER than it touched during the period
Of greatest strain the bargain counter OF
stocks does not present such alluring invita-
tions as il did before. 1t is, too, generally
remembered that the forces that have made
for the depression are still in existence,
and that although il may be that their full
effect has been measured, yet consider
able period must elapse before there can
be any confident resumption Of an upward
movement. II was pretty clear to-day that
the market had entered at least upon that
phase OF this general movement known in
Wall Street as the quick rally" London
prices for American stocks before the open
ing Of business we're quoted at advances
running from three to ten points and there
was a general rush here to buy securities.
All the houses dealing in fractional lots Of
stocks for small investors had multitu-
dinous orders for purchases and speculators
for the decline almost to a man stood not
upon the order OF their buying but bought
at once. Under the impulse Of all this the
market opened at advances fully as great
as those made in the London market. After
the first quarter OF an hour of trading prices
once more began to display weakness,
only TO again show renewed strength, and
feverish up and down movements OF this
character succeeded each other until the
close Of the first hour Of business in the
afternoon. Large and general buying OF
stocks then set in and the market closed
at net gains for the standard shares run
ming from to ~ points, the general ad-
vance being just about half OF that OF the
decline that took place on the two preceding
days.
Probably the market would have acted
"a il did to-day irrespective of any develop
ments in the days news that might have
been reasonably imagined. The action
Of the Secretary of the Treasury in ex-
tending relief to the money situation was
IL must be admitted. Of more sentimental
than practical benefit. The Secretary
announced that he would not call upon
the banks in the near future for any part
Of the special deposit funds Of public money
now resting with them, that he would buy
S25 900. 900 Of the Government per cent
bonds maturing on July at price which
would yield TO the owners Of the bonds
what they would get for them at maturity
and that he would begin to deposit Gus
toms revenues in the national banks under
the terms Of the Aldrich bill. 1t is obvious
that the first measure herein detailed Is
Of more or less negative advantage, that
the second may be effective if any con-
siderable amount Of bonds are turned into
the Treasury under il and that the third
will not amount to a very great deal unless
il includes a direction TO collectors of Gus
toms to deposit the moneys paid into their
hands in national banks in cities where
there are sub treasures as we'll as in
cities where there are not. The wording
Of the Secretary's order was somewhat
vague but il was construed to-day TO
mean that in cities where there we're sub
treasuTies-t that is TO say. the great cities
Of the country-customs revenues would
be- placed in these institutions as formerly.
While no definite statement was made as
TO the plans for the much discussed meet
ing between the President Of the United
States and the representatives Of the
railway systems. the impre ssion
became general that this meeting " Ould
not take place without some direct and
formal expression Of desire by President
Roosevelt that it should occur. and up to
the close OF business it did not appear
likely that such invitation would be ex-
tended The only other incident Of i'm
portance during the day was a break Of
IS points in sterling exchange, due, Of
course, to the heavy purchases of stocks
made here for foreign account and 10 the
natural lending Of European funds here at
prevailing stT rates Of interest. The
fan In exchange under ordinary circum-
stances would seem TO make inevitable a
movement Of gold from London to this
side. Circumstances. however, are now
,o- srov,. hoip0 ordinary and eXneCt a tionS