The Birmingham age-herald., 1907-10-30
INFRINGEMENT
 MUST BE OBSERVED Banks Lay Down Law to All
 Stock Brokers FEWER LOANS ON MARGINS Market Is Reduced To Narrow Dimen- sions and Nearly All Transactions
 Are Made On Practically
 Cash Basis.
FEWER LOANS ON MARGINS

New York October 29.-The banks as- serted their influence determnedly, and, in the estimation of holders of securities on margin, ruthlessly, today for the re- trenchment of borrowings on stocks. The announcement of the dissolution of the bankers pool yesterday, which had pro- vided funds last week to save the stock market from demoralzaton, was accom- panied by broad intimations that the pool had not been intended to bolster up spec ulation, or to attempt anything like a revival of strength in stocks by the use of borrowed money. Advice has been conveyed to stock brokers in terms not to be misunderstood, that the banks would frown upon any marginal opera tions in stocks. Brokers as a rule have refused to accept orders for such trans actions.
 The market is thus reduced to ex- ceedingly narrow dimensions, operations being restricted practically to buying of securities outright for cash. The lend ing of the money of the bankers pool last week was to have been done with a purpose to tide over the weakness to save the general situation. Some read justment is now in progress and some accounts are being forced out that seem to have been carried over last week with this condition attached. Calling of loans was on quite a large scale. With the buying, demand was limited to those with cash resources in hand. The effect on prices was not surprising, but was more or less disturbing.
 The lines of the discrimination ex- erted against borrowers was not clearly defined by any announcement on be- half of the bankers. nor was indicated by the character of the stocks which were being sold out these including high grade and active stocks for the most mart The reduction of loans by the banks thus affected has had a direct in nuence in reducing the severe pressure on the money situation, but the policy pursued by the banks has in mind the wider effects on the situation in the at traction offered to cash investment by the low prices of securities. This attraction was operative today both for home and foreign account. The considerable volume of the days market, while it marked the severe sacrifices of coerced borrowers, may he safely assumed also as meas ure of absorption by outright cash buy ing, since practically no other class of buying was feasible in the banking cred its to take up purchases on margin. Buy ing of this kind is relied upon as an important aid to the unlocking of cash resources, which have gone into hoard ing.
 The purchase of securities for account also is material factor in furthering the control of the international exchanges which may enable additional imports of gold. The response of the foreign money markets to yesterdays heavy engage ments of gold for shipment to New York was pronounced, The advance in the discount rate of the Imperial bank of Germany by full 1 per cent. indicated the determination to prevent withdrawals Of gold from that market The Bank of England was reported as discountlng nothing at less than per cent, which would indicate an intended drastic alter ation of the present Az per cent mini mum discount rate. There was can cellation of part of one of yesterdays s gold engagements and the recovery in foreign exchange today was on de- nand attributed to covering against some of yesterdays gold engagements. An