The Birmingham age-herald., 1909-10-11
Wildcat Speculation Is Given Setback During Past Week
POWERS COME ID RESCUE
When Slump In United States Steel Comes Big Financiers Stop the Decline and Restore Conf
 dence In Market.

New York, October 10.-The develop ments in the banking position were at the root of the disturbances which occurred in the stock market last week. The vul- nerable speculative position which these developments uncovered in United States Steel had a lively sentimental effect ON the whole speculative situation. Con fidence was jared by the demonstration that the movement in United Statss Steel was subject to the usual laws of the un- bridled speculation of a following given to reckless excesses with insufficient re- sources to protect their positions in case of a setback. Undue reliance on borrowed capital and a growing credulousness or favorable rumors, however extravagant, worked their usual consequences. When the banks began to call loans and hard pressed borrowers ran the call loan rate to per cent there appeared eager sellers of United States Steel to below 90, many of whom mad as eagerly bought the stock up to 947s on Monday, to the ac- commandment of confident predictions that the price would rise to par or above.
 Rich Profits In View.
 To justify this confidence there was emitted vague predictions of something which was to happen and which would of- fer rich profits to stockholders in an ae- cumulated form. It was asserted also that the resources of the pool which was accomplishing United States Steel were so enormous and their information of coming events was so accurate that there could be no mistake of the market programme that had been marked out. The power or the conductors of the United States Steel movement had been so often demonstrated in the course of the almost continuous rise in the price of the stock from the forties to above ninety, that their invul- nerablity had cnrEs to be regarded al most as an artlcye of faith with an ela- ment in the speculation.
 When the stock dropped abruptly on Tuesday to 9O16 after having touched s4B on Monday and then on Wednesday to S71h, the whole market was thrown into considerable disorder. It was not until then that the great financial powers back ing the United States Steel movement asserted their ability and came into the call loan market with millions of re- sources which checked temporarily the flood of liquidation and the fall in prices.
 Supply of Credits
 The violent break in foreign exchange rates coincdent with this appearance of a new supply of credits in the stock market was a sufficient index of the point
 aradifa The inference was confirmed by the prompt action of the Bank of England in rais- ing the official discount to 3 per cent from 21b per cent. The effects were at once manifest Throughout all money mar kets A probable further advance by the Imperial Bank of Germany was dis cussed and intimations came from Lon don that a further advance in the rate would be made if necessary to stop the drain of gold from the London market
 The placing of obstacles to additional borrowing abroad complicated the specu- Iative position in the stock market In view of the continued demand upon the New York banks incident to expanding trade and crop movements in the inte- rior Interest rates rose in all depart ments to the highest level touched since the stringency of the after-panic period.
 The tightening money market took away the effect on securities of any favorable development such as the record activity in iron and steel trade, the increase in the Atchison and other dividends and the more cheerful feeling over the corn crop promise. The dying down of demand from consumers for refined copper and evidence of renewed accumulation of sur plus stocks of that metal gave occasion for much dissatisfaction The serious i'm pairment of the cotton crop shown by the government report of condition made another discordant note in the general harmony of trade, industrial and agri- cultural advices.