New-York tribune., 1909-05-31
FINANCIAL MARKETS
HIGH STOCK FALUES.
Ease in Money Encourages Specul0-
tjor-SarangS Banks Interest.

crcculation in stocks III the last week was
made up in great part of the operations OF the
professional element, commission houses having
few orders for public account. while the sub
stantial financial interests who are the chief
holders OF securities were not active factors in
the trading The latter apparently are anxious
tn maintain prices at advanced levels, but at
the moment they are not encouraging an active
bull specuIatfon the attitude in this respect evi-
IDENTIFY being based on the theory that the main
tenance Of quotations around the current range,
with only the fluctuations incident to a traders
market will increase confidence among people
who have money to invest and lead to a heavy
outside speculation at a time when more eX-
tenslve plans for corporation financing de-
veIop. As money is cheap and promises to re-
main at low figures throughout the summer II
ought to be an easy matter to preserve stability
In the securities markets, unless the fact that
money is tending toward imitation should attract
at current high values widespread speculative
INQUIRY FOR securities. carrying the market TO
a point where it would collapse from its own
enormous weight At the moment stocks are
not widely held on margin account BY the pub
lie This element has been & factor Of some I'M
portance in the advance that already has taken
place, but it has had the good sense to take
frequent profits, and as a consequence specu-
lative conditions have been stronger than In any
bull market in recent years 1t should not be
assumed. however. that this situation warrants
the accumulation OF large speculative lines at
prevailing prices on borrowed money, though II
is conceivable that IN the event of aggressive
manipulation for higher quotations the out
siders would be quite willing TO buy beyond
their means, just as they have done at other
tines. despite the certainty Of ultimate specu-
lative decentralization. As matter of fact,
stock market values in most cases have dis
counted the favorable features in the indus
trial and financial position Of the country, and
at prevailing levels afford few opportunities
for attractive Investment purchases, the cnlet
exceptions being found in the so-called second
grade bonds and In the new mortgage offerings
that constantly are coming upon the market
Bond houses have difficulty in disposing OF
new issues, and the favorable market for this
sort of financing suggests the probability OF an
enormous amount of security fotatlons IN the
course of the next six months Since January
] more than S700OoOo00 new securities have
been put out.
Strength in United States Steel common leads
MANY persons to the conclusion that the directors
Of the corporation viii advance the dividend at
the next quarterly period, but the we'll known
conservatism of the management Of the concern I
does not encourage such an expectation in well /
informed circles. Though the business Of the /
steel companies has improved TO e marked de- /
gree IN recent weeks, operations still are under
normal capacity. and holders Of the steel shares
should be satisfied with present dividends for 1
the current year at least The best thing about /
the advance IN the securities Of the iron and /
steel companies is the reflection presented Of
actual trade conditions. As the iron and steel !
industry IS a trustworthy barometer Of trade |
-uvsp1r
manufacturers OF finished steel products /
strengthens confidence in all quarters over the !
future of the country's industries, which Ger /
tainly appear 10 be on the road TO prosperity OF
the most pronounced sort. Confidence breeds /
prosperity, but fl is TO be hoped that this con- !
fdence viii not lead 10 excesses in the specu- !
lative markets ExOrbitant prices work |
serious harm, and there is some reason for un- !
easlness over the extensive speculation IN com !
nodities which is increasing the cost Of living /
to an enormous extent; and the fact that the |
speculation in the grain markets is being con- /
Quoted on the unwarranted assumption that the /
years harvests are to be light involves an ele- I
ment Of danger to the operators who are blndly /
going ahead in their transactions on the theory /
that unfavorable weather conditions at the .
start mean a lean year in the agricultural COM |
munity The winter wheat yield doubtless will |
be lighter than in some past years, but a large !
acreage of spring wheat and corn Is promised |
in this country, while from present indications /
foreign crops will make bountiful returns. The /
Chicago speculators in grain announce that high /
wheat has come to stay. The same assertion (
has been made in the past only to be upset by /
natural laws, which cannot for any length OF
time he sidetracked by speculative conditions. /
According 10 operators on the bull side OF cot f.
ton there is TO be scarcity OF the product but
the cotton season also is young, and it is not /
safe to assume that there will not be enough /
for the worlds needs. There is entirely too I
much rash speculation in commodities for the /
best interests of the general situation.
1t is difficult to place time money for over |
the end of the year at anything better than 31s I
per cent. The mercantile demand at this centre /
is not heavy. merchants appear to be well /
supplied with all the funds they need. and q /
consequence the chief business in money at the /
moment is in speculative loans and in opera
tions involving the financing of corporation /
uuirernents through new issues Of securities F.
Sterling exchange remains at a high level. owing
TO the ease of money and the absence from the .
market Of an adequate supply Of bills; also to /
the higher quotations for funds at London. which /
last week showed a noteworthy advance. While /
the tendency favors gold shipments from here /
an Offset SO far AS borrowers who want ac-
commodation at easy figures is concerned is !
supplied by increasing banknOtc circulation. !
which simply tends to encourage speculation |
and bring about troublesome imitation The low /
rates for money and the limited number Of Sc |
curities in which savings banks arc permitted |
10 make investments, together with the high !
prices at which these investments are selling, |
have again brought to the front the old conten-