The Washington herald., 1909-08-22

New York, Aug. 2i.-The stock market
was brisk and buoyant In the short SEES
sion to-day, the rally which set In yester-
day afternoon continuing TO the close.
The nervously excited trading OF previ-
Gus days of the week was not at all in
evidence. but that excitement was re-
Elected in most Of the price movements
OF The day. II was a natural reflex that
those stocks should advance in the rally
most actively which in the reaction had
been depressed most heavily. and thus the
gains In Union Pacific. Southern Pacific.
Reading. and New York Central, which
were more conspicuous than most Of the
others. attracted no greater attention
thar did the strength OF the entire list
In these stocks the short selling had
been most determined. and the covering
by operators short Of them was naturally
more extensive and influential.
There is no doubt that short covering.
both IN these and other stocks. was the
priacipal motive underlying most OF the
purchases. but many commission houses
also reported extensive purchases by Gus
toners who were OF the opinion that the
reactonary movement was over. and who
had recovered a compOsure shattered in
the nervous market OF the previous day.
Shows Fair Recovery.
The range at the close showed a fair
recovery from the reaction with steel
common. for instance. but two and one
half points below its high record price
and most OF the other standard railroad
and industrial shares not more than two
and one-half points below the close last
week. There was no news Of market
Importance. and the trend OF prices
seemed entirely governed by the natural
reflex movements.
In week OF declining prices. Il Is nat
uraI TO expect contraction OF bank
loans. for the purchasers at lower prices
can borrow less than the holder az higher
prices Accordingly. the loan items in the
two bank statements aroused q good
deal Of curiosity. The average state
ment Of the clearing house banks showed
a decrease Of IS, $4,000 in the loan ac-
count: that OF the state banks and trust
companies showed an expansion Of $l2..
$4,000 IN loans The net result. an ex-
pansion OF 50 10000 In loans. Indicated
that these money movements ran counter
90 the customary trend in a declining
market. But. in this connection. il must
be appreciated that an important accu.
mutation OF stocks in the week prior e
the reaction had been by men Of consid,
cradle wealth. who bought them for a los
pull. and at prices we'll below those pre-
vaillng even at the bottom Of this week.
reaction.
Finance own Purchases.
Most OF these holders OF large blocks
I,r 81,
sonally at the banks. rather than through
brokers' and II they had stood al the
high prices last Saturday and Monday. OF
even at the lower prices in the following
days. the purchasers would be able 4
borrow more on the stocks than could
have been borrowed by these large hold.
ers at the time OF their purchases.
In accordance with this course OF rea.
soniug IL was pointed out early In tbt
week that the best indication OF a profit
taking movement among these men VIII,
had shus taken on stocks for Ions
pull weeks or even months ago would
! be found In a big expansion in the loar
account.
I Now II IS well known that customer.
Of commission houses have sold this weel
a large total OF stocks carried in brokers
loans at higher figures prior to this weel
and that this liquidation has had
| tendency toward lean contraction. An,
/ the question naturally arises as {,
whether 1t is the liquidation by the biz
/ holders referred 20. ia a very broad an,
extensive way. that has more than offse
I the contraction naturally resulting from
! the other liquidation. Thus the banI
! statement provoked an interesting an,
perhaps an important discussion on IN,
always pertinent question as to the 10
| cality OF the stocks