New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1909-08-23
FINANCIAL MARKETS
STOCK PRICES LOWER.
Heavy Liquidation in All Parts of
the List Outlook for Money.

north y, the issue found ample justification in
the course Of the issue in the week just closeo'
and throughout the list the movement OF prices
reflected the weakened technical condition OF the
market and the hazards involved in buying
stocks al the levels prevailing at the opening in
MONDAYS operations. Union Pacific sold at zig
on that day. and from that figure ii declined TO
2O3i. in Fridays market, the fall belns ac-
conpanied by a tremendous volume of forced
liquidation and heavy pressure from the proies-
sional element while in all the leading shares
q slaughter OF margin accounts was reported
without any adverse change in the real FACTORS
affecting investment value. The decline was
due 10 overspeculation at time when the bear
element was able 10 utilize with profit the
r,lrnors regarding Mr.. Harriman's health, the
unexpected early return of that eminent nlAh-
cier and railroad man from Europe, with olliCiaI
reports that the eneTvating baths at BAD Gas
tein had caused a loss Of ten pounds in MS
weight being put forth as reason 10 believe
that DEVELOPMENT work on the Union Paclnc
would cease that stockholders would receive no
further benefits and that the passing or the
control OF the New York Central 10 the Harr1-
man interests would not be brought about Rea-
soning OF this sort is silly. but IT is enough TO
Brighten foolish spectators out of the market
and provide attractive buying levels for the
powerful interests which permit the public TO
have their stocks at the best figures OF the
year The Boston oracle announces a tremen-
dous decline in Union Pacific, United States
Steel and Reading. but there is nothing in the
present position OF the market 10 warrant this
expectation: nor is there anything in outside
conditions that should encourage uneasiness
on the part of the investment owners Of Amer
lean securities. The general position of the
market would be strengthened by a readjust-
ment Of prices 10 a lower level. and in well in
formed Wall Street quarters II is believed that
further material reactions will develop before a
healthy bull movemen: can be engineered.
Reckless speculation has been checked and
Is believe strong financial
interests which desire a stable market. in which
opportunity will be found for the legitimate
distribution OF attractive securities 10 actual
investors at fair prices recently extended advice
that amounted TO a command that bull commit
ments should be reduced. especially in Union
Pacific. Reading and United States Steel COM
mon the three stocks in which speculation has
been active. The Stock Exchange has the
power 10 exercise undscriminatng author
fly over its members. and In view OF the rec
concentrations by the Hughes investigating
committee It is quite possible that the governors
have made suggestions TO certain houses that
their operations We're not in line with the best
interests of the situation. while it is possible
also that substantial speculative interests with
a hankering for lower prices have taken ad-
vantage OF such warning TO hammer the mar
ket 10 extent that has made liquidation COM
pulsory. And as usual. the public operator has
been the heaviest sufferer The refusal Of many
commission house traders 10 realize their profits
when the market nearing the top has re-
suited in severe losses. but the lesson learned
by those who lost will not, II precedent is fol-
lowed. teach others 10 stay out of speculation
when the expert men OF Wall Street jockey
ing for killing AS all conditions I'm the world
outside OF Wall Street point 10 the development
Of long period OF industrial prosperity securi-
ties should be good purchase on the declines
by people who afford 20 buy outright on
long margins and IL further downward reac-
lions should be recorded in the current week
he ifv mill ed for fha
chase Of investments at reasonable quotations
Even Union Pacific in the neighborhood Of 200
is not dear 10 per cent stock with the pos
sibility in view OF a better rate. though IL is
not a safe proposition for the public operator
who makes his ventures on borrowed funds
Money doubtless will be dearer before IL moves
20 lower level Indeed, all the signs point 20
a period Of stiff loan quotations In the autumn.
with a gradual hardening from the current
range as consequence Of a growing demand
for funds at the interior I'm connection with the
financing OF the harvests and for the require
ments Of general trade.
In local speculative circles the idea prevails
that bank resources throughout the country are
enormous and that the needs Of the interior viii
he financed without assistance from the East
This theory always crops out at this time of the
year and always has been refuted by subse-
ouent developments. The report Of the Com
mercial National Bank Of Chicago. whose in
quiries money requirements the most
tnorOugn ana trustworthy yet MADE shows that
the country national banks June %. 1909. had
s76.s32OOO Of holdings in excess of legal
quirements These holdings include accumula-
uons for harvest requirements I'm wheat growing
districts. yet they We're 100000 less than on
July Is, 1908, and only 1900 900 more than
August %. 1907 The report referred 10 says:
This showing disposes Of the myth that the
country banks are carrying large sums of idle
money. The cash reserves Of all the national
banks on June % last exceeded the legal re-
GnfC nv 1lzT >
on the eve OF the movement OF the largest crop
ever produced in this country. AT high prices
and with trade and industry rapidly approach
Ing normal activity does not promise easy money
In the fall The margin for expansion is very
small and prevailing interest rates are unques-
tionably out Of line with the situation. More
over, ability TO draw money readily from
abroad is impaired at the beginning Of the sea-
son by the fact that our foreign trade balance
is down 10 the lowest point I'm twelve years. The
fiscal year ended June 30 1909 showed an excess
of exports over imports OF only 1851 600 OO0 COM
pared with an average of $500. OOO 600 for five
years preceding. Not since 1897 has the coun-
try been reduced 10 small a margin The
explanation OF il is reassuring, for II was due
mainly 10 falling off in agricultural exports
which viii soon be remedied and a rapid in
crease in the imports OF crude material for
manufactures. which is good sign Back Of
this undenably unpromsing situation. however
the great gold reserves and low interest
rates OF Europe and the fact that our credit
abroad is fully restored The United States Is
TO-DAY. in the opinion of foreigners the most
promising field for investment in the world
Undoubtedly can borrow what money We
temporarily need I'm anticipation of the heavy
exports which this years crops assure. II is
not altogether comforting. however. TO know
that our security in an emergency is 10 be found
In the financial systems OF other countries"
Interior exchange is moving against New
York, and the az Montreal suggests an ac-
tive withdrawal OF Canadian bank balances from
this centre. 100000 this account already
having been Skinned Canada viii need a large