New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1909-10-11
FINANCIAL MARKETS
LOWER STOCK PRICES.
Call Money at s Per Cent and Time
Money Higher-Gold Import
Possibilities

by transportation for the long account ana
money market conditions foreshadowed severe
collapse in prices in the event of continuation
of manipulation for higher prices. Wall Street
some Of its bankers has been preach
ing the doctrine of easy money In the face OF
developments that have pointed to the end OF
the period OF low loan quotations that began
after the panic OF 1907, and overenthusiastic
operators in securities have been loading up with
stocks at fancy prices through the medium of
local and foreign money accommodation regard
less of danger signals and known factors gov
erning the money and sterling exchange mar
kets. and even now that the lending price for
funds has advanced in response to the demands
Of expanding trade and crop requirements q
certain element in the Street maintains that Sc
curities excellent purchase and viii con-
tinue their upward movement irrespective OF
conditions that suggest the extreme risk of fur
Their operations for a rise in Stock Exchange
values An authority on money stated last week
that the large speculation in stocks had been
based upon the imitation of credit, and not upon
the surplus earnings of the people, as II would
have been in a genuine boom. The same author
ity says: we are on the of finding out
whether IL will be possible 10 continue specu-
lation with our present resources. The question
is one of grave Importance and is well worthy
of the attention of those lenders of money who
are financing the present movement in United
States Steel common and other stocks Based
on the position of the banks in this country ana
the demands that are being made upon them
upon the rising discounts abroad and upon our
heavy Indebtedness TO Europe. no sane man VIII
admit that such speculation as has been wit
messed in recent weeks. when in two days alone
inward of 100000 shares of United States Steel
common were reported dealt in on the New
York Stock Exchange can continue without
upsetting the financial situation and working
injury to our growing industrial activities.
Call money advanced TO per cent last week.
and bull SPECTATORS said that the market was
,o;po- tod in interests of the adVO-
Gates of lower quotations for securities. The
Bank Of England advanced its minimum rate
Of discount per cent and the same thlhs
was said OF the governors action. open market
discounts advanced at all the foreign capitals
and IL, +he movement bull interests saw con-
sniracv to upset their campaign. II none! hau
not advanced there would have been reason TOT
the assertion that the loan market was belh6
rugged Rates have been cheap for SUCH long
time and the banks have pressed so much MONEY
mon borrowers that an impression has beeA
created in some circles that anything ABOVE =
or 3 per cent call money market TOT any leIis III
of time is out of the question. put TINS lue"
doubtless soon will be succeeded by the otheI
ex+ray,e that we are entering an extended time
of monetary stringency The money market
needs the protection OF a quiet specula'loI! al
stocks of an active liquidation of loans against
speculative commitments and of a read1ustnehI
of stock prices 10 a lower range. Ihere VIII DC
no serious disturbance in the money market
unless reckless speculation Is allowed TO run On,
Mon is becoming more active IN the chahhelS
of trade and the outward movement OF currency
from New York merely represents Wlthdra"a'S
~ interior bank balances that have been IN
vested in the East il the period OF traue uePFes-
sion for use in marketing the crops ana TOT ths
u1lrposes of general Industrial expansion IlIs"
money rates as a consequence Of business
c-ro1rth is something different from The sim
quotations recorded in days OF panic, as lor
instance in the disturbance of october, 4su''
when the rate for call funds touched IoO per
can+ The period of cheap money that has pre-
vailed throughout the world for many months Is
| At an end and the sooner Wall Street conforms
its ideas 10 the outlook of firmer interest rates
| the better will be for the SITUATION III genera
| Bull operators are counting upon NOV eIiielI1
! ~ gold from Europe this autumn, thoush we
| have no credits abroad upon which imports couId
| he based despite increased shipments OF cotton
at higher prices than those current a year ago:
Some gold may be attracted TO inns cehIIe Il
| money goes 10 a level that will be enough ABOVE
ba ra+ae in F,rope TO attract direct loans, but at
| ,ba moment London IS discriminating against
| American finance bills and is taking measures
| 10 protect its gold supply against demand Ior
| New York account 80
| The Imperial Bank OF Germany doubtless VIII
| make another advance in its discount rate to-
/ dav and Il is likely that the Bank of England
] will raise its rate to per cent before the emu
/ Of the month, and higher if local SPECTATORS
/ persst in their attempts to shove stocks up on
| tho exDectation OF securing foreign accommo-
| datfor for their operations The Bank or Eng
land showed a falling off in its reserve last week
! of Z per cent from the preceding week. ana as
! the Continent is taking the weekly conSlgh-
/ ,,,ep,e Of South African gold that are onereu
=, tho omen London market, and the English
! hank Is financing a demand for gold from Egypt
| South America and other points. II IS not hkely
! that the governors Of that conservative hs'Itu
| ton will permit any drain upon It's resources u
/ b.lr on, crowd of reckless American specuIa-
! 80 cneculation in United States Steel com
| mon last week carried the price 10 level that
| discounted an increase In the dividend 10
! or per cent basis, its high at "a 70 pelhg an
advance of 534s points from the 10" point h'au1
on February % of the present year IN com
| 80, NTH orher issues the stock declined on the
! advance in call money TO per cent showing
| maximum loss of rs points the doWhWaiu
| movement being accompanied by heaVy Selling
/ nv the public traders, who had been oVerspecu-
/ -. =, ,ba stock on the cocksure conviction
/ 10, there could be no reaction in the price
/ this side Of par United States Steel common
| &c the Junior security OF a wonderfully success
! f,ll corDoration that promises in 1910 10 pTedh
4 al reco~ds in the matter of production aho
earnings hut this fact does not warrant an IN
/ definite advance in its price. despite the specu-
1 la,iyc gossip that there will be no END 10 th'
/ a,-,o1,7,t of dividends and melons that viii &c
I turued over 10 the owners or the security d
ebould be borne In mind that the United States
/ steel CORPORATION always has been managed II
/ the most conservative manner and upon strictly
/ h,.siness principles. II long ago adopted tIi'
policy Of returning vast sums from earnings I,
the property. and there is no reason 10 SuppoS .
nat any change will be made In TINS respect
,bono, wall Street bulls say that in the future
tr,nrovelnents on the property VIII be capltal'
tzad and all surplus earnings Will be turned over
10 the stockholders. This idea Is wholly IN iiil'
with the silly sentiment that accompanies a.
| bull markets. ,.,;. .,r+b ~
Conditions governing the intrinsic worm o
l[-,car Investment securities are SOUND am
outside of our miserable currency system tnei