New-York tribune., 1909-05-24
MONEY AND BUSINESS.

that have not advanced TO levers retuIiIilS ''''
unattractive income yield to the buyer. the
movement including modest inquiry Tor 1or-
eign account in the bond market. in which So
called second grade issues are becoming popular
owing TO their steady enhancement in actuai
worth Offerings of new mortgage securities Tor
refunding purposes and to raise additlohal
money for extensions and general improvements
are made at figures that appeal to investors
who exhibit in their operations supreme cohh-
dence in the credit Of our railroads and IN the
belief that financial and industrial atfa1rs rest
upon a foundation Of growing strength Large
holders recently have reduced their lines Of sur
plus stocks but not in manner TO weaken 'n0
market though the general tendency of prices IN
the last few days has shown in minor reactions
the effect of realizing sales. Banks and bank
ing houses are anxious to preserve stability IN
the market at prevailing quotations, and 1t IS
worth noting that they doing nothing 10 en-
courage wild speculation. which invariably ehuS
in collapse The leading railroad stocks closed the
week at an average OF 125.25, against 125.05 IN
the preceding week. with the chief industriaIs
at s1.50, gain Of SO.
Money rates have fallen back to the easiest
figures of the year as consequence Of Iishter
demand from SPECTATORS heavy receipts Of cur
rency from the interior and the appearance III
the market of foreign loans the gain on the out
of-town movement of funds having offset ship
ments of gold. which In recent days nave
amounted to more than s6.0OO.O00 A week ago
the banks were able to secure per cent on
over-the-year Ioans while at present the best
obtainable is 334 per cent, except on snlah
amounts The mercantile demand for accom-
mediation shows some improvement. as reflected
in a better supply of commercial paper. but the
inquiry in this department of the market IS
lighter than is ordinarily witnessed at this period
Hoe. e nov
at interior points, which enable the banks out
side of New York to meet home requirements
without drawing on their balances at this centre
Our banks are in sound condition. but the
enormous expansion in speculative loans in the
last wear and the extensive use Of bank funds
for financing new corporation needs suggest
disturbance in money rates if speculation IS per
ratted to run to dangerous limits Loans are
heavily in excess of deposits. and are at the
highest level ever recorded. while reserves
though large enough for safety. are relatively
low, with actual resources being weakened by
the outflow of our best money. The scarcity OF
commercial bills compels shipments of the yel-
low metal but at the moment there are tndica-
tions Of increased merchandise exports and
heavier buving of our securities for European
account the development of which will have an
important bearing on foreign exchange condi-
tions IN our favor.
Industrial affairs in all parts Of the country
show encouraging gains, evidence of which is
found in rising bank clearings heavier railroad
earnings both in gross and net; in enlarged
building operations in greater activity In the
metal trades and in the reports received from
interior merchants. Consumptive demands are
increasing in every line of business. The United
States Steel Corporation has decided to main
tain wages while the independents haYe agreed
to restore their payroIls to the basis prevailing
before cuts in prices were announced the move
rnent rejecting the belief the part Of the
manufac cturers that the outlook is for continued
expansion in this important branch Of the coun-
try's industries Perhaps one Of the best feat
ures of the iron and steel situation is the dispo-
sition of the steel producers to prevent sharp
advances IN prices, their idea being based upon
the sound theory that moderate and gradual I'M
provement in quotations for finished products
will be Of greater benefit to the trade than the
development of a runaway market. The demand
from the railroads for iron rails, steel cars and
locomotives is heavier than 1t has been at any
time in many months And the general inquiry
for finished materials and pig iron IS active
enough to foreshadow the return of steel and iron
to normal basis much sooner than was recent
" thought possible. Copper IS stronger, and the
metal is moving more freely. Surplus supplies
are diminishing as q consequence Of increased
domestic and foreign buying. with indications
pointing to a price of 10 cents pound in the
early fall.
Commodity prices show great strength. Cot
ton advanced last week to the highest level Of
the wear. and domestic wool exhibited activity
on a rising range of values, Western markets
being excited under the influence Of an eXtraOr-
binary buying movement. Trade in cotton goods
is light at firm prices with suggestion of
lower quotations, owing to the strong underlying
conditions in the primary and secondary mar
kets and the practical certainty that buyers
VINO have not yet filed their requirements viii
be compelled 10 enter the market at higher fig
ures Speculation in cotton futures IS heavy,
and In spite Of beneficial rains in Texas bulls
maintain that crop conditions not promising
and that the demand for the staple in the months
to come will be enormous from all parts Of the
world The spot markets are firm and sales at
Liverpool are large, advices from that centre
and Manchester indicating pronounced improve
rnent in the trade with China. Spectators here
are assuming with or without reason. that the
American crop this year will fail short of the
needs Of consumers. but 1t is rather early in the
season to take a pessimistic view Of the harvest.
Exaggerated unfavorabe crop reports from
the West and from certain parts Of Europe are
responsible for the notable activity Of the
bulls in wheat which again is selling at
high levels for 1909 The winter wheat crop IS
late but the acreage of spring wheat has been
materially increased while from current reports
a record-corn acreage is probable. upward of 75
per cent of the crop having already been planted.
Flour is quiet and firm, holders maintaining
strong views as to further advances owing to
the continued strength in wheat and the appar-
ent confidence on the part Of the Chicago oper-
ators that expensive wheat has come to stay.