New-York tribune., 1909-07-19
FINANCIAL MARKETS
WEEKS STOCK CHANGES.
NoSt Issues at Higher LeTets-
Honetoru Conditions.

preceding record of the year on June IL when
the railroad shares sold at 12s2S and the in
dustrisls at 81 IS From June II TO June p
there was z gradual decline 70 124e2 for the
railyav issues and 50 SIS Tor the industriaS. while
since the latter date there has been slow i'm
provennent 70 the closing saturday. which for
the prominent rails was 1850 ard for the chief
industrials o5. Advancing prices bring forth Of
ferings from interests who believe that the time
has come TO realize profits. but selling Of this
character is so quietly conducted that its effecr
upon quota tons is unimportant, the idea OF the
larger operators apparently being TO maintain 4
strong market until stocks IN the hands Of
weak pools and individuals, when no doubt, the
usual consequence of such a situation Will de
velop. Technical conditions are growing weaker.
and when period Of advancing money rates ar
rives there NAV be some trouble for accounts
that being extended on borrowed funds. An
enormous amount Of stock is being carried in
bank loans, and every indication points toward
the liouidat alton of loans heavy scale just
as soon as the demand for accommodation in
connection with the financing of the harvests
and the autumn trade requirements arises,
though at the moment loan quotations ere 50
easy that the ordinary speculate refuses TO be
leve high rates possible. The chances are an
unusually large sum Of money viii be Withdrawn
from this centre in the late summer and autumn.
and though foreign exchange naturally will de
cline under the pressure Of offerings Of hills
against cotton and grain exports there is no
tainty that this country will be able TO import
any considerable Of gold unless acute
stringency should develop here. Bankers do not
anticipate disturbance in the money market, but
they do look for higher quotations for loans and
active liquidation of stock exchange accounts.
with lower prices for all grades OF securities.
1t should be borne In mind that have
shipped abroad since January ] more than S72.-
100000 in gold. that cash holdings of the local
banks are only trhe larger than at this time
year ago. against an increase in loans of s9S.
SeS.20o. And il also should be borne in mind
that the high price of commodities, the gain in
the general cost OF living the increased activity
in sll lines OF trade and the high wages paid to
labor are certain 10 make inroads OH our idle
supply Of money that can hardly be offset,
far easy money rates are concerned. by do
nestic gold porduction and the sale to foreign
countries OF food products cotton and gen
eral manufactures Current indications point 70
4 cotton crop below the normal moderately
heavy wheat crop and q large corn harvest, but
with our constantly increasing home demand for
consumption tC be cared for there viii not he
an enormous surplus for export requirements.
Government financing OF Panama Canal con-
struction and the possibility OF the issuance OF
short term certificates of Indebtedness to in
crease the federal working balance on ordinary
account will be factors OF the future that also
should be taken into account in present calcu-
lations on the course of the money market in the
rest OF the year Money is exceedingly easy at
London. but the Continent is beginning to draw
on the British capital for gold while direct ship
ments of the metal are being made to Argentina
Il is not expected that these demands viii be-
come an important factor in the London market
in the immediate future though discount rates
already reflect in a f1rmer tendency the with
drawais of the yellow metal and suggest the
development of stronger rates when the usual
fall trade requirements develop and when New
York may be anxious to import gold. The mon
etary situation here looks stronger than il really
is. If there were in this country a currency
system responsive TO the demands OF trade there
would be little reason for uneasinsss over the
course Of the market in the months to come, but
with our rigid. bond secured system which
courages imitation at times when the mercantile
demand is light and the speculative demand
heavy, there IS ample argument for waving the
danger signal at this particular period.
A large part of the government deposits Ic-
turned TO the Federal Treasury last week will
again find its way into circulation through the
banks taking out increased circulation on the
bonds released by the Withdrawals Of govern
nent deposits and spectators are looking for
ward TO this with unusual pleasure. As the
banks are upon the threshold OF the crop NOV
ing period, there is some excuse for increasing
circulation just now, but system that permits
imitation of the currency in times of congestion
is bad, particularly it tends TO force out gold
In 1904 and 1905 had congested monetary
conditions in this country. and in those two
years we exported s173.959.000 gold, while so far
in the present year more than sT0,000,060 Of the
metal has gone ont including S34 600 600 to Ar
r,ean obligations at Buenos Ayres AT the
pense of this market Since July l. 1908. there
has been q reduction in the amount Of govern
nent deposits in national banks Of about s99,-
600 600 and in the same time there has been an
increase in the amount Of national bank notes in
circulation Of 74oo0, and decrease in gold
coin in circulation Of s13.12o 900. The ccuntrys
imports of gold and its gain from gold prcduc-
tion from the Western and Alaskan mines have
not Offset the gold exported, and the government
not only is not in position to increase its depos
its in national banks, but It is Withdrawing the
small balance now held by these institutions
and will be compelled 70 come into the money
market at no remote time for additional funds
The general monetary situation in this country
ought 70 convince our lawmakers of the neces
sity Of real currency reform while il should en-
courage extreme caution in speculative opera
tions that depend upon borrowed funds. espe-
cially in the next few months Crop conditions
suggest that the movement of grain will be
heavy this year and the banks will soon have 10
gather in their resources TO handle it That they
are beginning to make preparations for this !
hna ncing is reflected in sales for their account
a new high record for the year last week, due
chiefly 10 the rains and foods at Kansas City
and its vicinity, but general crop reports were +,
even those for cotton
Factors affecting the intrinsic value of securi- !
ties are most satisfactory. The iron and steel /
trade continues 70 improve, and the various
plants Of the steel companies are now working on
4 basis not far from normal The independent
of steel have advanced prices,
and pig iron mas been placed on higher level
The United States Steel Corporati ton WILL IL is
understood soon raise its quota tions, and it is
the expectation OF this and the signs OF ra pidly
accommodating orders that convince the Street /
that the dividend on the concerns common stock .
will be advanced al the next dividend period. /
Mr.. Morgan is his way home from Europe. /