New-York tribune., 1909-09-14
FINANCIAL MARKETS
BANKS LOSING CASH.
Stocks Open Weak, RccOrer and End
HcaUy-UmOn Pacific Dozen.

After a weak opening. in the course Of which
losses of from TO points were recorded the
general list Of stocks hardened under the infu-
ence Of temporary support from banking circles
that encouraged an active covering movement
and renewed operations for higher prices by
the professional element. though noteworthy
improvement was confined to a few issues. The
fact however that the market able TO
recover at all from the initial weakness. which
was accentuated by heavy selling Of American
shares at London and liquidation here for for
eign account strengthened confidence in bull
quarters in the belief that the more important
Street interests still I'm favor OF the long
side of speculation and would check any ten
dency toward price Generalization. In the early
afternoon stocks hid UP on the filling or
the vacancies in the Union Pacific board from
men within the Hartman ranks and the cleo
tion Of Judge Lovett as chairman OF the eXecu-
tive committee, the action Of the directors dp-
parently foreshadowing the carrying out Of the
policies that have made the Hartman securi-
ties such prime investment issues Further ir-
regularity. however, developed before the close.
and In the larger number of shares the ten
dency was toward a lower level in the late
trading Union Pacific dropping below the open
ing quotation and ending more than 3 points
under Saturdays final price. The cessation of
buying by the shorts and the absence Of active
support induced renewed operations for the de-
cline, and with the exception OF Amalgamated
Copper American Smelling, American Telephone
and Telegraph, Baltimore Ohio, Missouri Pa
cifc and Reading the prominent stocks closed
at net losses. Reading, which advanced more
than points in the earlier operations lost most
of the improvement in the last hour transac-
tions this issue, with Union Pacific and United
States Steel supplying more than cne-half Of
the total dealings.
The reserve above legal requirements of the
Clearing House banks is almost at the vanishing
point, and movement Of money In the current
week similar 10 that reported in the last six
business days will bring about deficit for tho
first time since the days of the panic Fortu-
nately the withdrawal OF funds from the banks
is due 10 the growing needs Of the industrial
world rather than for the purpose of boarding,
as noted in the fall OF 1907 and cash holdings,
therefore. below the amount required by law
against deposits will create no uneasiness in
financial circles, though they will result in
higher rates for loans and possibly in stock
market liquidation Outstanding loans are heavy,
and In addition our bankers have loan ac-
count abroad probably far in excess of any trade
balance that may arise from exports of COM
modities in the next few months. We are not In
position TO draw gold from Europe and IL Is
unlikely that the situation will change i'm our
favor 10 an extent that viii attract substantial
amounts OF the metal from abroad ia the
autumn can any assistance be secured from
the federal treasury from deposits of govern
ment funds. for tho good reason that the na-
tional treasury has but a small working balance
and probably Will be compelled to issue short
term certificates TO strengthen its own cash sup
plies Against these certificates national bank
notes can be issued. while in reserve We have
the untried emergency currency law but even
with the help that may be had from this quar-
ter IL is impossible 10 avoid the conclusion that
the local money market is approa ching period
OF high quotations for loan accommodation. The
outward movement Of currency is beginning to |
make itself felt The demands from the interior |
In connection with the financing OF the harvests
and for an expanding Of volume of general busi-
ness will increase in the next six weeks, DESPITE |
the fact that out-of-town banks as a rule are |
in strong position, and as so far there has
been no great disposition to reduce loans against
speculative commitments it is easv 10 see that |
bank resources are not in a condition 10 meet |
some unexpected unfavorabe DEVELOPMENT
Monetary conditions quite likely 20 deveIop |
situation that will furnish a convincing argu- |
Inent for real currency reform Any attempt TO J
bring about an active bull speculation I'm securi |
ties in the immediate future will he fraugbt |
with the gravest danger for the people CON !
cerned I'M the movement and IL is to be hoDed /
that' Tor the welfare OF the financial and busi-
ness community. all efforts I'm the direction of |
making buli market for the present at least
will cease. A quiet speculation AZ This tin,o
and readjustment Of prices 10 a lower ,a,,a,
will insure higher quotations later In the SEQ,
son The countrys Industries are movins, on
lines that toreshadow great prosperity hut mn
wise speculation just now would tend 10 checlr
this progress notwithstanding the predictions
OF certain element In Wall Street that ,,ott
ing can happen TO create disturbance. On ~,
declines investment shares will be worth bu,,irs,
for cash. This column IS extremely buIlisb o1er
the future, but Il believes that the innmediato
present is no time for speculative commitments
on the bun side of the market on borrowed
money