The Washington herald., 1908-01-13
Slow Improvement in Prices
During Past Week.
RATES FOR MONEY ARE LOWER
Basis for Apprehension ia State
naents Of Current Railway and In
dusfriaI Earnings - ReeefVeFshfps
for Two Trunk Lines-StOcks Highes
Than at ANY Time since October.

! ~ impressed upon the financial COM
munity last week. and particularly upon
that portion Of il whose daily business
/ it is to buy and sell stocks. that. tax
/ ing the entire course Of the security mar
! ket since the recent panic. continual
/ Improvement IN the situation and a
steady elevation of values were per-
/ ceptble.
Most of this time. taking the affairs
Of Wall street IN one specific day after
another. it has seemed as if very little
was occurring that could justify the
conclusion that any decided ameli0ra-
tion was going on. The majority Of
professional spectators have been con-
stantly bearish, and the talk in the COM
mission houses in the uptown clubs, and
in other meeting places of business men
has been as a rule one Of discourage
mcnt
And yet looking back over the last
two months. it is plain that-nOw sd-
vancing now receding. now standing
still, and then again 1uctuating In a
seemingly aimless and irregular way
prices in the security market have yet
throughout slowly and steadily forged
upward The underlying strength Of
the market was more visible last week
than at any previous time. Events from
a strictly speculative point Of view were
on the face OF things and for the most
part not calculated TO induce buying OF
stocks
Railroad Troubles No Surprise.
Early IN the week came the news OF
the Teceiyership for the Seaboard Air
Line. followed later by a similar an
nouncement in the case Of the Chicago
& Great Western Railway Company.
and both Of these developments although
they did not exactly take people in Wall
street by surprise. were yet somewhat
unexpected.
There was a good deal of speculative
disappointment over the failure Of the
directors of the Northern Pacific Rail-
road Company 10 declare an extra divi-
dend on the stock. Again. TOO. there
were the failures locally last week Of
several prominent jewelry firms and
the reports Of very heavily decreased
railway earnings for the month of De-
cember- ana particularly for the last
week OF the month which emphasized
the vigorous business curtailment that
Despite al this, the stock market last
week was stTOns,- than it has been az
any time since October. On the DAYS
when the Seaboard Air Line and the
Chicago & Great Western receiver
ships became known prices receded a
little. but il was al once manifest that
no serious liquidation was prompted
and that the efforts of spectators for
the fall to force stocks TO a lower level
on the bad news were only partially and
momentarily successful.
HOarded Money in Circulation.
After a panic in any security market
that has represented in substance the cul-
mination Of a long previous period Of
slow depression it is invariably found
that stocks have been removed from the
market by the purchases of investors in a
much larger quantity than has been sup
posed, that the market is oversold bv
the speculative element whose efforts
for a decline in values have for long
time been attended with continual VIC
tories and that, IN a word. prices have
been forced 90 q level which a good deal
more than discounts all the adverse con-
tingencies that the declining market
fOreshadOwed.
When, therefore. the adverse contin-
gencies begin to pass into the realm of
fact the market does not decline. because
what happens had been fully expected
and prepared for. Then very quickly it is
found that the boarding Of money which
WAS the acute cause of panic ceases. and
that the hundreds of millions Of dollars
that have been withdrawn from circula-
tion. return once more and with a rush
70 the old time channels of business; and
bof in
swing last week became so clear as TO
be universally undisputed
The renewal rate Of call money loans
sank for the first time since the panic
below per cent a level which, if il Is
continued. viii quickly force the retire
ment Of the local clearinghouse certii-
Gates, inasmuch as there is no bank that
will borrow money from the clearing
house at per cent when it can obtain
il in the open market at lower figure.
Certain weak banks whose troubles have
been matters of nOtoTiety, may continue
10 keep out the certificates that have
been issued TO them until their affairs are
IN permanently better shape or il may
be. are wound up; but as a general prop
osition a steady ) II per cent call money
rate means the end Of the clearing house
certificate issues
In the next place time money is being
more and more pIentfully offered. not
only by out-of-town banks. but by local
Institutions the prevailing rate at the
end of the week being 61-2 per cent for
sixty days. and per cent for all other
periods. There was larger and larger
buying of commercial paper. especially
by the interior Institutions. On Thursday
the Bank of England made an extremely
strong statement of condition. reporting
an increase in its proportion of reserve
10 liabilities, from S5.52 per cent, TO 4S15
per cent.
The most important occurrence Of the
week was, of course. the action OF the
Bank of France. on Thursday. in reduc-
ng its former discount rate from 4 to
1-2 per cent.
This means 10 Wall street that the large
number of merchants and others who are
forced TO borrow money in their daily
business. can now do so on reasonable
terms; that those who have been in
voved in difficulties because of the
Of money in recent months and
not because of any impairment of their
actual sOlvency, can now readily obtain
money to pay of the loans by which
they were carried over at the time of the
stress,
Business Conditions StiII Bad.
The contrary side OF sLs financial bal
ance is. however. just now the fact that
while the financial situation proper is
greatly improved and is continually inn
general business over the coun-
Try is depressed and shows at the moment
no very visible signs of betterment
Ground for encouragement is certainly
that there have been no such large mer-