New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1909-10-25
FINANCIAL MARKET
STOCK PRICES DOWN.
Monetary Conditions Check
Bull Speculation.

| speculative operations interest ralSS
| throughout the world are advancing,
and traders who have been carrying
stocks on borrowed funds find 1t difficult
| to renew loans with the promise by the
| lender that conditions indicate an easier
situation in the near future, while III
many cases long stock is being forced
upon the market as a consequence OF
weakened margins and logical bear at
! tacks upon prices In last weeks mar
ket prices moved as rule in the direc-
ton of lower level, the movement being
| helped by the refusal of French bankers
to accept American stocks as collateral
| in loans, by the unwillingness of Lon
don to renew maturing finance bills that
were drawn earlier in the season in con-
nection with stock market commitments.
by the radical advance in the Bank OF
England's minimum rate of discount and
by the rise in local foreign exchange
rates to the gold export level.
A large amount of the precious metal
was taken at the close Of the week for
shipment to South America, presumably
for London account. while in well in
formed banking quarters 1t was thought
that the increasing demand for exchange
in connection with the liquidation of
American loans at London and the matur-
ing New York City loan of s25.O0O,000 at
the British capital on November l might
lead to exports to London in the current
week The advance by the Bank of
England in its discount rate placed the
quotation practically on the basis OF
British capital, but the action of the
directors was based more on future pos
sibilities than on present needs. as the
institutions proportion Of reserve to
liability is somewhat above the average
for this time in the last eight years. The
Bank Of England has taken a defensive
position, and it is not unlikely that it
will be able to shift the demand upon It
for gold to Paris, where exchange has
been unusually strong and where dis
counts are we'll under the English quo
tations. In the advance there is Il warn
ing to our spectators to look elsewhere
f. than London for accommodation, and it
is 10 be hoped that the local speculative
community will adjust its ideas accord
ingly.
Drawers of finance bills have not Sc
cured the profits that were predicted in
the summer. when it was thought that
at maturity exchange rates would be at
relatively low level In July ninety
day money here was quoted at pa to
21e per cent, and as at that time funds
were almost unlendabIe in London, Brit
ish bankers transferred credits to this
side. but at the current rate of sterling
there is little profit on the finance bills
that were put out here earlier in the
yeaT and under present conditions 1t is
not surprising that our foreign loans are
not being renewed. especially as open
market discounts in London are abnor-
mally high for an autumn season. Or
dinarily exchange at this centre declines
in the fall under the influence of a heavy
trade balance in our favor. In June,
July and August, this year. however, our
imports of merchandise exceeded ex-
ports, while for the nine months ended
September 80 there was a. trade balance
in our favor of only s92, 292, SS2, a de-
! cline of s33s.976,299 from the same time
! IL the year before. The outward move
! illtllN VI lilClAildllulSc III september was
in excess of imports, though the latter
showed a heavy gain from 1908, and in
the rest Of the year further Improvement
should be recorded, especially as our
cotton is going abroad in volume at high
prices and increasing shipments of food
products are reported.
The general outlook does not encour-
age disturbance in the money market
here, barring the possibility of reckless
speculation that would strain our credit
resources, but it is quite certain that
anything approaching easy money will
not be seen for months to come AS
interest rates in all parts of the world
are responding to the expansion under
way in general industries. the advance
in money cannot be considered an ad-
verse development, except for overex-
tended spectators in securities, who are
now confronted with the proposition of
liquidating their accounts or else pay
ing an amount for accommodation that
will not make new commitments appear
attractive. The situation existing to-
day in the money market has been pre-
dicted by all careful students of financial
affairs, but in speculative circles and
even among some bankers who should
have been better informed. forecasts
along these lines constantly haye been
| belittled.
The speculation for higher prices in
United States Steel common apparently
is at an end for the present. Liquidation
of this issue for the account of the peo-
pie who engineered the bull movement
in it has been going on in recent
weeks, though ordinary operators on the
| Stock Exchange and in brokers' offices
have refused to believe that the big in
terests have been dumping their holdings
upon the market Steel common, it is
understood, will be placed on L 4 per
cent basis to- morrow, but this develop
ment has been fully discounted by the
advance in the price of the security, and
il is not likely to cause a revival of bull
activity in the shares of the United
States Steel Corporate or in other
parts of the list, for the good reason that
| money market conditions are against a
resumption Of transactions for the rise,
while In addition TO this factor there is
a strong bear party ready to oppose any
attempt TO lift quotations United States
Steel cOuoD,an as 4 4 nor cont Stncly will