The sun. [volume] (New York [N.Y.]) 1833-1916, 1907-06-30
FINANCIAL AND COMMERCIAL.
June 20.

price OF stocks was, IN view OF the news OF
the day andthe known condition OF the in
.Vestment pntrket only esplioRble1on one OF
three grounds; FIRST, that the market wa
|. being pushed Upward by main force by
. large financial interests with the idea OF
obtaining Il higher level upon which TO
liquidate security holdings; secondly, that
speculative commitments for the decline
IN the market are present in larger volume
than has been commonly supposed and are
now in a process Of either voluntary or in
voluntary retirement, or, thirdly, that favor
able developments are hanging over the
financial situation OF which no glimmer
has yet been allowed to reach the outside
public. So far as there may be supposed
10 be present any demand for securities on
the part of people who propose TO pay for
them outright such inquiry is, according
10 all information gathered in trustworthy
quarters, practically non-existent, and this
fact was sufficiently attested by the fiasco
that attended the city of New York's offer
ing yesterday Of municipal stock. 1t is
true that the argument was heard to-day
In speculative circles that the failure OF the
city for the first timeNin a very long period
to sell its bonds on a 4 per cent. basis should
not exercise a depressing effect financially,
inasmuch as il meant that bond houses and
others would not be required for the time
being TO raise money to carry the 500 900 900
OF new securities that the city endeavored
to sell; but such an inference, of course, does
not diminish the force of the conclusions
drawn from the failure Of the offering as
20 the state of the investment situation.
Again. to-day the weekly return OF the
Clearing House institutions revealed what
could not be described with justice as
other than a serious condition OF local
financial affairs. Although ban loans
decreased during the week 1888, 100 lowing
TO an extension OF credit by trust COM
panies and other n~on-reporting institutions
due to the higher range of call money rates,
the cash holdings Of the banks so fell on
as to result in a decrease in the bank sur
plus OF SO, III 1926, leaving the total surplus
at 81, 500, 275 against s12 ,OS5, $50 at the same
time in 1905 and at the lowest figure save
once before on record at this time Of the year.
This small bank surplus would not in itself
be of grave significance were IL not for the
fact that this is the season when the local
bank reserves should be at almost the high
est point of the year. The time is less than
two months removed when our local banks
must begin to feel the drain Of large amounts
of money for the purpose Of moving the
COOnWY CTODB. DdHh TtSSIN wee VIII III
deed he augmented in the next few weeks
by some receipts of money from the in
terror Of the country but 1t appears wholly
improbable that they can be at all reen-
forced by gold imports, if indeed they are
not actually reduced by gold exports. Ger
tainly on the face Of things the financial
outlook for the reminder Of the year is
sufficient TO justify caution in all specu-
lo&tua rant,,raa for tho Tiaa in Ctpole and
yet after the publication of the bank return
to-day there was a rapid upbidding Of
security prices which, coming on top Of
the previous advance during the week,
caused the price Of many of the leading
stocks to stand at large net gains as COM
pared with those recorded n fortnight ago
e Although the common understanding
In Wall Street is that the recent advance
In stocks has been due TO a rather weak
sort Of speculative buying and that the
movement has not had the ~Countenance
of ina ncial powers of the first rank there
Is no doubt that general confidence in the
= financial situation has improved. The
truth is that the security market reached
a point some weeks since where II was
sold out" and probably .oversold, y as
SPECTATORS understand the words. Those
who had made commitments for the decline
saw the chances of recovering stocks at
lower quotations in the near future be-
coming slender aud a portion of these
operators at least have reduced their out
standing contracts. Aside from the failure
of the New York city bond sale the news
OF the week was generally encouraging.
Despite the publication of estimates by
various so-called authorities that the spring
and winter wheat h~arvests this year will
both be smaller than was predicted even
O month ago the prevailing conviction
ih-the grain trade Is that the crop outlook
10 decidedly better than il was on June 4.
Reports OF railway and industrial earnings
as they we're received during the week
we're highly satisfactory, such as the
Atchison's exhibit OF an increase in net
revenues for May of $3.50 600, the Rock
Islands net increase for the same period
OF sle0, 900, the Atoms and Southern Rail-
ways net increase of 100000 each and
Of the American Car and Foundry Com
pany's really sensational yearly statement
showing u surplus in the years earnings,
after paying the dividend on the COM
pany's preferred stock, of S6,o3o ,O0O-equi-
valent TO a dividend Of over 20 per cent.
on the common shares-and of a total sur
plus OF over $40, 900, 900. No doubt mixed
VIII MI III ldNoldDh0 lilitltiSGS hldN II
from such statements is an idea now very
prevalent in the minds OF investors n
financial observers that all this amount OF
business, especially in the case of industrial
concerns, represents the execution Of orders
placed a long time ago, and that the out
look for the business OF next year is not
clear. In consequence of the usual financial
preparations incident to the end Of the half
year call money rose briskly toward the
end OF the week, causing in turn, very
naturally, a cessation Of gold exports,
and there was a q~uieting down OF foreign
political alarm. A specific reason, how
ever, almost universally advanced in bank
ing circles for discouragiug an advance in
stock market prices at the moment was
the fact that money reserves at this centre
were not in sufficient supply for such a
movement and that unless they were re-
enforced there was D probability OF severe
financial strain in tine autumn
Rev Work stock Exchange SaIesr June 70.
CLOSING Prices or UNITED STATES BONDS.
UtU, ipEd. H1 AtEed.