New-York tribune., 1908-09-07
THE FINANCIAL MARKETS
WALL STREET OPINION DIFFERS OYER THE PROB
4BLE COURSE OF VALUES BEFORE ELECTION.
Money Large Supply Light DemandIncreased Gold Pro-
ducion viii Help Prices
THE WEEK IN WALL STREET.

There is a wide difference of opinion in wall
Street regarding the probable course Oh prizes
on the Stock Exchange in the rest OF the hi'I'ii'
and many conflicting views are notlceo as u 'iio
significance of market movements last week III
many quarters IT is believed prices VIII seer
materially higher level before election Whiie III
other quarters II is thought the decline 'ha'
developed in Fridays operations 1oresnaoo"s
the beginning of a gradual lessening in bull
activity and cheaper quotations before 4>o'eii
Der. though that decline did not disclose any
selling bv tb- substantial interests who for
MANY weeks have been buying securities ana
directing their efforts toward establishing prices
at a more advanced range. There were reasons
in the Iechnical position of speculation for
reaction but there was change in the con-
dition of affairs affecting actual values tha'
warranted bearishness on the part OF investors
It is quite certain that the professional eleiheh'
,vouId like to see a good sized decline, while it
also is certain that the leading banklhs ana
railroad interests in the country are anxious Ior
a better quotation level, higher prices for
investment securities will encourage broader
market for new issues. which to be put out
in connection with railroad expansion plans,
while they will strengthen confidence in business
circles which naturally will tend TO help along
industrial revival Stock market values, of
course have made tremendous gains since the
panic prices of year ago, and according to the
belief of some observers the advance mas more
than discounted present and prospective I'M
provement in the country's business 1t should
be borne in mind. however, that STOCK market
values run TO extremes and that there Is a
chance now of quotations advancing TO absurdly
high figures, just as they ran to rldlculously low
figures in the panic period.
Commission houses report that they are car
rying little stock for public account If this is
&c n
speculative supply of stocks is in the hands or
the big capitalists who with money at the cur
rent cheap level carry their accounts prac-
tically without cost, as dividends more than
offset the rates for bank accommodation Doubt
less holders are growing somewhat anxious over
the lack of public buying power, and the chances
are that if they should try TO distribute their
holdings at the present time they would find no
market, but from what may be learned Of the
attitude of the Hartman Frick-Rockefeller COM
bine they will continue to carry their stocks
until conditions drive the public into the mar
ket probably at higher prices. The big interests
are counting upon the election of Mr.. Tart, foi-
lowed by a marked expansion in all lines OF
the country's activities, an enlarged speculative
demand in all markets. and the immediate in
vestment of the large sums of idle money in
stock and bond market operations There are
some people in the Street who believe the coun-
try will run into an era of great speculative
activity and excessive imitation consequence
of the vast accumulation of money in all the
leading centres in the United States; also in
Paris and London. 1t is to be hoped that moth
ing of the sort will occur, it will interfere
with healthful resumption of industrial activ-
ity and end in financial disturbance. Fortu-
nately there is evidence of coming wave
of overspeculation in Wall Street or overspecu-
lation and overstimulation in trade, but it must
be admitted that with the election out of the
way and the Bryan ideas again forced TO the
rear, the big supplies of idle money in our
banks and other institutions, together with the
increased production of gold and strong funda-
mental conditions, will offer great temptation
to overenthusiasm in all markets. In the
last twelve years gold production in all coun-
tries has been enormous amounting TO $780,
100000 and let-up in the movement is in
view. Increased gold production means higher
prices for everything, and the decline in the
price of manufactured articles and in the gen
eral cost of living following the 1907 panic was
merely temporary recession incident to an
upward movement
One of the effects of the great amount of idle
funds and the consequent low rates for money is
reflected in a more active bond market and
considerable purchases of prime railroad mort
gage issues by the banks. The banks glutted
with money, and they can make better profits
by investing it in the bond market than they
can in loans the latter ruling lower at present
than at this time in many years The average
price of the representative bonds on the New
York Stock Exchange has increased 3h per
cent in the last thirty days. and as rule prices
higher than they were at this period
year ago. though they may still be purchased
return than the price of money. Do
mestic exchange at Chicago on New York does |
not yet indicate any great demand for currency |
from this centre in connection with the financing
of the harvests but the chances that before |
the end of the current month the interior in
qury will become active and will be heavy
enough TO bring about a reduction in local
bank reserves. Time money is extremely easy |
for all periods, while the demand is light There
is no prospect of extensive mercantile de- |
nland for funds yet awhile, as the country's |
industries, while showing improvement, are not
moving on lines that suggest immediate !
revival of that sort of business activity that
calls for great assistance from the loan market |
Business conditions are sound, credits are
stronger than they have been in years, and con-
fdence is growing in trade circles; but consum-
ers are moving cautiously, and consequence
producers not enlarging their operations to i
any material degree. Improvement is reported |
in the volume of exports OF grain, and to small
and in the course of the next few months the |
outward movement of food products and cotton
will be heavy a forecast of which is found in
the accumulation of a large short interest in the
foreign exchange market That sterling will seek
lower level in the autumn is admitted by for
eign exchange bankers. and though this country
will not require gold imports. far the
money market is concerned it is quite probable
shipments of the metal will be made to the
United States entirely as result Of exchange |
market conditions.
American Smelling and Refining Company's |
poor earnings for its last fiscal year, the heavy
falling off in earnings by the Pennsylvania. and
the active buying of the Hartman shares were
among the factors that Influenced the movement
of values in the last week Apparently there
has been good deal of manipulation in Smet- |
ers stock. and the chances are there will be |
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