The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1908-01-11
TAKING PROFITS
CAUSED A SLUMP
Professional Element in Wall
Street Quick to Make the
Most of Opportunity.
EFFECT SHOWN ON MARKET
WEAK CLOSING ON RAILWAY
DEVELOPMENTS.
EFFECT SHOWN ON MARKET

New York, Jan. 10.-After opening
with buoyant upshot of prices which
gave a material extension to the rise
OF yesterday, and then maintaining an
appearance of great activity for a time,
it began to be manifest that the pro-
fessional operators in the stock mar
ket had been busy taking their profits
in the hurly-burly of the days trans
actions The market showed the eff
feet of this change in technical cOndi-
lions after that. The reduction of the
short interest which has been driven
to cover by the extent of the advance
suffered a demand from one source.
The early market showed some eXpan-
sion of commission house demand also,
attracted by the appearance of reViV-
ing interest and a strong recovery in
the market. This demand facilitated
the taking of profits by the profession
al party which has conducted the spec
ulation up to this point The latter
market became duh and hesitating in
tone in consequent with these develop
ments. There was little in the news
of the day TO indicate marked changes
in recent conditions
The usual forecast of the weekly
currency movement agreed in report
ing very large cash gain, the esti-
mates differing TO some extent on the
amount of cash from local sources
which has come into sight during the
week. This refiuX. it is said, is con-
siderable and represents the coming
out of boarded funds, held in the hope
OF profit from the currency premium or
fICm motives OF distrust. The inflow
OF cash from the interior has been larg-
er than last week, the balance in favor
of New York on the export movement
being estimated at approximately S.
100000. The arrivals of the last of the
gold engagements have been sufficient
TO oVerbalance a small absorption on
sLb-treasury operations.
The stock market rallied briskIy from
sharp reaction when these figures ap-
peared. heavy cash gain this week
has been taken for granted, however.
throughout the week following the evil
dence in last weeks bank statement of
a decisive turn in the movement The
speculation in stocks during the week
has been based largely on an asSump-
ton that the deficit in the legal re-
serves of the New York banks would
be practically wiped out this week.
Last Saturday the deficit still stood at
ll.5O9.55O, so that il will be Derceived
that its Obliteration seems TO denend
on substantial loan reduction. The
revival in speculative activity during
the week must have some effect on the
loan item, and there have been some
large purchases effected Of commercial
paper, which also would figure in that
Item. With the decline in the interest
rate to the neighborhood of 6 per cent.
which was the rate paid by the banks
on their clearing house certificates. the
erect would be lost immediately. The
FACTORS in shaping the bank statement.
therefore. are cOnsidera bly, mixed.
Discounts continued to fall in the
foreign money centers and the Aus
traila Imperial bank marked down it's
ofhc1al rate. An item of the davis
news was the statement of the gold /
production at the Rand in December
which rose to 5SS,526 ounces, a record /
output for any month. With the reac- /
uoh IN the stock market caused by the 1
speculative prOfit-taklng, there came |
into consideration again some of the /
topics which were driven into the back
ground.
Financial news of some railroad svs-
TENS OF which the credit is not bigb
gave rise TO renewed misgivings. The
pressure on Southern railway securities
especially was conspicuous Rapid in
now Of cash TO bank reserves is expect
eu 10 be taken advantage of to replen-
lsh the United States treasury's work
- 'Sli'4iOt w ooillS AuitueE WlthQraW-
ais OF government deposits with the
banks. Another requirement for addi-
uonal cash is suggested by the move
nent or the trust companies toward
membership in the New York clearing
house, which will involve a very ma
terial increase in cash holdings bv
nose institutions. The markets weak
closing was under the influence of the ;
stump in Southern railway stocks and !
bonds. with its strong suggestion OF ]
serious financial embarrassment for the
company.
Bonds were irregular. Total sales.
par value, $3.50. 900. United States As :
coupon, declined y per cent on call. s