New-York tribune., 1908-02-03
THE FINANCIAL MARKETS.
WEEK OF SUSTAINED PRICES DESPITE UNFA-
VORABLE NEWS DEVELOPMENTS.
The Closing Bans-Unted Repor-ond Market
Re1i1a-Money Rates Losc.
THE WEEK IN WALL STREET.

GepCV
Developments have in the main been OF a sort
not calculated TO aro-se bullish fervor; and at
the close irregular changes were shown,
with no noteworthy advances or declines. Five
banks. four of which were members of the New
York Clearing House Association. closed their
doors but these suspensions. the first Of which
was announced on Monday morning, were prac-
ficalIy without market effect. being regarded as
part of the cleaning up process following the
panic OF October and not as indicating re-
crudescence of the panic conditions. -Four OF
these institutions were formerly under the con-
troll of the interests whose elimination as factors
in the banking situation was one OF the earnest
developments of the panic period and the h1th
was suffering from the fact OF the identification
Of its former president with the banking opera
tons OF a group Of Brooklyn financiers who
came 10 grief in October The closing of these
banks preceded by runs when occurred
also in minor degree in the case OF certain other
institutions but there were of the indca-
tions of public perturbation which marked the
occurrences OF the runs III the panic days, and
the local banking situation may now be SAID 10
have become again normal, and to be stronger
and sounder than for several years, with the
passing of the new idea in banking control
and banking methods The depos!tors of the
suspended banks will in all probability get their
money in time. but the best banking opinion Is
that none of the institutions will be able to re-
sumo business: and il will be many day before
any man or group OF men will judge the occa-
sion opportune for repeating the financial eX-
plots of the men until recently in control of
some of the banks just closed.
The Immediate response of the stock market
To the Presidents message OF last week was a
moderate rally in prices, for the Presidents
special communications 10 the Congress are ex-
pcCted by Wall Street be radical; but the
later effect was to depress prices TO some eX-
tent, the interior taking a more serious view OF
the message than was taken locally, and 3c-
cordingly sending in selling orders in some vol
The report of the United States Steel
Corporation for the quarter ended December 81
showed net earnings about as expected the re-
suits for the month of December being particu-
arly meaEre and suggesting the probability OF
d sharp decline in earnings during the current
quarter. The unfaVorable showing for the De-
cenlber quarter. however, had been fully dis
counted, and the price changes for the Steel
issues during the week extremely slight.
The decision of the United States Steel Corpo-
ration and other leading steel manufacturers to
maintain prices for their products is in line with
the policy of the Steel Corporation, which since
its organization has been potent factor in Sc
curing stability in the industry. in the old days
subject to the widest fluctuations in prices; but
it remains be whether that policy
can be adhered to if the business depression
shall not soon show signs of lifting
The cutting in half of the dividend of the Big
Four" road had unpleasant effect upon mar
increaSe in the dividend rate of the Nickel
Plate it brought out the probability of SIM
liar reductions by other roads if business should
continue to shrink. for fixed charges must be
met, however small the volume of traffic handled.
The governments legal steps against the Union
Pacific had little weakening influence the Sc
curities of that road others of the Hartman
system, the determination to endeavor
compel the Union Pacific to divest itself of its
interest in certain other roads not including the
-bo,
declared policy and as Wall Street does not
believe that court decision be obtained
pronouncing the Southern Pacific parallel and
competing line with the Union Pacific.
The money market ruled easy during the week
call loan rates rising above 2 per cent and
time funds being offered in heavy quantity al
rates averaging lower than in the previous week
slightly frmer tone was apparent toward the
end of the week, due partly to the preparations
for the February interest and dividend disburse-
ments and partly to the Withdrawals of govern
ment money from local depositary institutions
with the object of repenishing the Treasurys
working balance. The latter cause may be ex-
pected TO continue operative for some time, as
the governments revenue is showing a deficit
but the Withdrawals for Treasury use will not in
future come entirely from the national hanks of
this city. Those Institutions, however are in a
position to meet with ease very heavy drain,
as is seen from the fact of the $40 900 900 sur
plus reserve now held by the Associated Banks
Money is still coming to this from the in
terror, and the flow may be expected to continue
Tor an indefinite period, as, owing the general
stagnation of business throughout the country |
the inland banks are unable to find profitable |
employment at home for their funds and ac- |
cordngly forward them this city no longer |
deferred from that course by fear of the sta |
biLty Of the local financial institutions or ap-
prehension of runs by their own customers
But recovery from the effects of a panic how
fpn nd fba
causes, is necessarily a slow process The stock |
market has had a substantial rally from the |
panic depths to be expected but it has |
now relapsed into dulness in which there is little
demand for the idle funds offered for loanfne at |
such low rates, and the lightness of the mer- /
camille demand also reflects the temporarv
paralysis of industry and commerce Conf
dence has not yet been restored, and without
confidence there can be no business activity and
no prosperity. Although conditions abroad are
improving, Europe is not Yet buying American
securities, but the approach of better days for
tls country Wili As in the past be indicated by
revival OF confident buying and of positive
strength IN the stock market. for the men whose
position is on the business heights are able 10 |
see long before IT can become apparent to all
the first sign of promise on the business horizon
ana are accustomed to act promptly on the
hhoWieoSe- mat this is a year of Presidential |
campaign is an unfortunate circumstance as in |
such years the tendency is To go slowly" in |
business, but many of the political uncertainties
VIII have been cleared up within a few months |
and by the close of the year, it is widely be- |
ieved the country will be once more on the I'D |
grade.
The excellent demand for bonds is taken as A |
highly favorable augury of the imminence of the |
business revival. for recovery in the bond mar
set always precedes the return of strength in the
stock market and in trade and industry The
1uylnS OF bonds embraces wide range of issues |
which are being taken at advancing prices by
hE anfi