New-York tribune., 1909-07-12
FINANCIAL MARKETS
LIGHT STOCK TRADING.
Quiet Distribution Under Way
Outlook FaUOrs Higher Money.

Stock market prices are near the best level or
the year and quiet distribution by substantial
holders appears to be under way Manlpulatioh
which is calculated 10 convey the idea that quo
tatiOns are moving toward a materlai hlsheI
range is evidenced in the character or the cur
rent trading, but while the general hsI mas
looked strong from day day only few issues
have made substantial progress. Advances are
engineered for the purpose of sh1fting StochS
from strong to weak hands. and In view oi 'le
great appreciation that has taken place III Ie-
cent months and the enormous profits that pres
ent prices represent to the people VINO pousnl
securities at the low points of 1909 and 1908, II
is not surprising that with the approach or the
time when money rates must rise the important
speculative interests gradually hquldaIlhS
their lines with the expectation of returning
10 the market at q time of cheaper quotations.
Stop orders have been placed in every active
stock dealt in. and the bear element Is awaiting
its opportunity for a killing
The idea that prices will go lower is held In
derision in circles where declines are not thought
possible in a period OF business expansion and
bright prospects for a tremendous increase In the
material wealth of the country as a consequence
Of abundant harvests, but the fact remains, new
ertheless that wise realizing their
nrohts at prevailing levels and are looking for
ward TO a setback in the general market before
further substantial improvement can be brought
about. Money conditions at the moment do not
suggest the immediate calling of loans, or diff
transactions nor is there anything in the situa
tion governing the actual value OF investment
securities that warrants uneasiness on the part
If holders. The intrinsic worth of securities Is
based on a secure foundation. but there is a
difference between the value Of q security and
its market price that should be taken into con-
sideration by buyers. and just now that differ
ence is so great that good investments are nor
as a rule attractive purchases, despite the ease
Of money and the strength of factors underlying
real value.
Stock market prices have more than discount
ed the favorable developments in the business
world and the splendid progress Of the countrys
grain crops. Technical conditions of speculation
are not strong, and the enormous amount OF
stock that is being carried upon borrowed money
foreshadows heavy liquidation when the INDUS
trial needs of the nation become more OF a
factor in the loan market Certain large man
cial institutions have taken advantage of the
ruling high prices TO reduce their stock holdings.
and in the last week selling by banks was re-
ported. the latter movement rejecting dls-
position on the part Of the banks to prepare for
the demands that soon will be made upon them
in connection with the financing of the years mar
vests And II may be we'll 10 note that already
domestic exchange is beginning TO move against
New York, the rate at Chicago on this centre
now being quoted at a discount as against
substantial premium fortnight ago. The loans
Of the associated banks are $93.26I.SOO larger
than they were at this time year ago. and
s2441447OO heavier than in 1907, while cash
holdings, as compared with this period in 1908
show gain of only S9.459.000 while the re-
serve above legal requirements is well under the
1908 record, though still at relatively hhsh
point.
The interior has sent an immense amount OF
currency to New York since January l. put III
that time we have exported more than $64Ooo-
600 in gold with the indications pointing TO fur-
ther shipments before the exchange market viii
receive the benefit of an outward movement OF
grain from this years expected heavy yield Ine
fact that much money has been sent 70 TINS
centre for use in the speculative and investment
markets assures an active return movement in
the late summer and autumn, especially as the
needs of the West and South will be urgent as
q result Of general trade requirements in addi-
ton to crop demands. 1t is quite likely that
money will command better price at New
York than at foreign capitals in the fall and
European lending in this market therefore may
be reasonably counted upon, while 1t is quite
proba bic our exports of grain and cotton VIII
attract gold from abroad, but assistance OF this
character will not prevent a stiff market for
loans or insure a bull campaign in securities
The course OF the stock market in the next few
months Will be governed by money and by tech
nical conditions Of speculation and though there
IS no sign of immediate slump in prices II
NAV prove wise to take profits at current quota
tions and TO stay out Of the market until
cheaper buying level is established.
The country is making the sort Of progress
that should strengthen confidence in the value
Of our railway and Industrial securities. Rail
road earnings are increasing. the iron and steel
trade is growing more active every day. tariff
readiustment discussion soon Will be out OF the
way and the outlook favors heavy grain crops
and better cotton crop than recent estimates
suggested. The last report Of conditions in the
cotton belt showed a material depreciation in
tie thirty DAYS ended June 25. but since that
time Improvement has taken place. while with
favorable weather in the next two months the
final harvest should be far in excess of the esti-
mates based on the governments June figures.
Traders on the Cotton Exchange see nothing
but rust and shedding ahead, and Gulf storms
that will wipe out the plantations, 10 say moth
ing of a visitation of army OF boil worms.
but in spite Of this pessimism. which is ac-
companied by the talk of accent cotton there
are $4,000 900 acres Of the growing plant with
the worst part of the season behind it. The
safer half of the cotton season is the second and
with favorable conditions in the rest of the
summer a crop Of 100000 bales may be gath
cred.
calculations regarding the grain harvests de-
mend to 4 great extent upon the conditions
shown by the governments July report, and as
the figures Of this report, published last week.
showed marked Improvement in winter wheat,
which early in the season was distresslngly
poor condition of spring wheat that fore
shadowed more than an average harvest ana
a situation in the growing states that indi-
Gated something better than before record
ed IT is safe to assume that the agricultural
sections of the country viii produce bumper
crops which most likely viii be sold at rela-
lively high prices. The worlds supply OF gram
is light while the demand for consumption IS
increasing along with the gain in population. 1
Cheap grain is out of the question. and the
chances for a lower cost OF living in the near
future are not promising. But with the hign
cost OF living there is going on material in
crease in the wealth of the nation. Corn acre
This year shows gain OF 121SOoo over
1908. and on the basis of the governments
report Of conditions there will be YIELD of B.