The Birmingham age-herald., 1908-01-08
STOCK MARKET IS GAINING STRENGTH Striking Advances Are Made
 In Certain Stocks RECONSTRUCTION GOING ON Rapid Improvement Is Noted In the Money Market and Influx of Funds
 Into New York Adds To
 Strength of Banks.
RECONSTRUCTION GOING ON

New York, January 7.-There was contraction of business in stocks at the stock exchange today and the market gave other indications of a conserva- tive attitude toward the advance which came into play yesterday. Cautious profit taking was pursued where price advances had proceeded far enough to make this attractive. In a group of high-priced stocks in which purely speculative ac- counts are at all times small on account Of the large sums required to operate in them, there were some striking advances. Stocks of this class suffered most severely in the ruthless liquidation of the last few months. Usually they are supported by buying in sufficient amount for protec- tion to their security as collateral in loans. When the panic ruled however, all such customary safeguards were swept away and prices dropped away many points at time on marketing on small supplies. Now that the strain of such selling is past, it is found possible to mark the prices upwards by successive bids with great facility. There Is much reconstructive work of this kind to pc done in the market and the clearing of the financial skies is being availed of tc perfect it.
 The buoyant appearance given to the market by these striking advances is of great service in sustaining speculative confidence in the pushing of operations for the rise in stocks ofswhch the floating supply is much more liberal and which are at all times much more active. In these the effect of the freer market sup ply was obvious today in holding back the prices while the inactive specialties were rising buoyantly. The evidence of sell ing to take profits, when any sustaining influence in the market offered favorable opportunity gave some suspicion of the rise in prices which has occurred and of the opportunities which have been put in circulation to account for them.
 Professions were still made today with great earnestness and appearance of en-' tire confidence that a large dividend on Northern Pacific had been determined upon, although it was admitted that meeting intended to act on the matter had been postponed. No official inforina- tion could be secured, and information was thus kept in real speculative eenters. The stock was quite steadily sold all day with ultimate decisive effect on the tone of the whole market. Evidences of the rapid improvement in the money sit- uation continued to manifest themselves but they were not so stimulating to the speculation as they were yesterday Ret ports of difficulties in the diamond trade, although adjuNed by trusteeship gave direction to some of the discussion which pointed to possible mercantile em- barrassments in other directions. The in- creasing demand for commercial paper furnished one possible safeguard against such difficulties and its development there fore is watched with satisfaction.
 The important point about the refluy of interior bank funds to New York banks deposits which has now set in a plentis ful stream, is that the loaning capacity of the banks making the deposits is not impaired by it, although the available credits of the New York central re- serve banks are greatly expanded by it. This is by reason of the provision of the banking law which permits national banks outside of three reserve centers to count as reserve of their cash kept on deposit in the reserve and the central reserve centers. The surrender of this provision in the panicky calling home of bank deposits from the reserve cities was the most demoralizing factor in the crisis