New-York tribune., 1909-07-05
FINANCIAL MARKETS
STOCK TRADING LIGHT.
Prices Generally Higher-Money
Easy, but Sitter Rates
Looked For.

some of the larger interests appeared to be
liquidating with the purpose of transferring thcH
accounts to the industrial group which, IL Is De
lieved. will be the centre of speculative atleh-
tion in the next important movement on the
bull side of the market AS rule, the lhuus-
trials have not advanced to levels that repre-
sent the small investment return as mStahCeu
in the larger number of railroad securities and
as a consequence of this fact and of the accu-
nulating evidence that the country is entering
a period of intense business activity 1t Is rea-
sonable to credit the theory that the heaNleSI
speculation in the months to come will be in
the stocks of our prominent industrial corpora
tions especialIv as the floating supply of rail-
road shares has been materially reduced as
result of the steady investment absorption III
the last year In the case OF United states steer
common II is asserted, and on good grounds. that
the rise of its price TO the nelghporhood Oh ~
discounts the Improvement in the iron and stee!
trade but the claim is not made IN any quaIteI
of the Street that the issue will not be entltieu
TO a better quotation year hence AND In llhe
with the Streets habit of trading on the Iutui7
II is ror unlikely that in expectation OF a year
of great expansion in the steel INDUSTRY, "illi
+be probability of a higher dividend before the
end Of the next twelve months. the STOCK VIII
move to a better level long before the directors
increase the dividend payment This probaph-
ttv however. does not preclude the posslollIy
of a material setback in its market value IN tne
course of the next few months when the oeVel-
onrnent of a weaker technical position of specu-
laflOn and better rates loI illoAitS my
about a general liquidating movement on 'ne
stock Exchange Stocks have been advanced
on q ! u to per cent money market "nT"
call money advances, later in the season th7
people who believe stocks are cheap lid! 10
compelled to revise their ideas
Stock market bulls elated over the per
sistent ease in money, but they shoud pear III
mind that IN spite OF the liberal margin oI Ie
serve above legal requirements in the ioCal
hanks conditions are developing that eVentuaHy
r7ust he reflected in an advance in loan quota
tons The outlook favors heavy crops IN li'0
current year at good selling prices. ana tnS
financing of the harvests will not be done WIN
ont the assistance of the New York hhahclaI HI
s+itutions Interior banks have sent such enor-
NOUS amounts of currency TO the East IN recent
months that they will be compelled 10 ara" "h
this centre when the crop demands deNeiop'
,,7il. in addition they will, from all Indications
have heavy home mercantile requirements u
meet as a consequence of industrial expansion.
And these demands will come at time Wheh
the Secretary OF the Treasury may De loFCeu "
do some government financing In the way OF
sales of Panama bonds or in the issuance OF
nor cent certificates Of Indebtedness in order 20
Increase the federal working balance pehuliS
the hoped for heavy gains in national reNehNe
fr,r, the rasdiustment Of the tariff. which at
the moment does not appear a deVelopmeh1 ol
the Immediate future. Fortunately. government
income is irrproVing result OF the gam III
our export trade, but as the actual "orklne
balance in the Treasury is unusually low, "Ille'
Sf withdrawal $-''vvV.SV'
,nent deposits from national banks called Tor
last week II will be impossible to secure further
relief from this source il is safe to count upon
some sort of government financing that wiz
have a direct bearing on the local money ihaIhe
Loans OF the New York banks are heaFhE III
e,cess of those recorded at this time q year ago.
and the reserve is about one-half or that on TINS
dav in 1908 though deposits against Whleh d
reserve has TO be carried S96.00OOOO larger
than the same item at the beginning of last july
s-x-ftf move
ruent Of currency from the interior, show ma
terial loss New York has exported more thal
ss1 100000 gold since the first OF the year ana
further shipments Of the metal are indlca'ed'
owing TO the scarcity or eAchahge ana 'le dNN''
demand for remittance
Most railroad stocks are selling for all they
are worth based on earning power ana income
return of the companies which they represent
They are too high TO attract investment plU-
chases while they are dangerous for marginal
transactions despite the fact that powerful
speculative interests may be able to carry prices
to better level before material decline de-
Velops There is at the present time however
no suggestion in the character of the movements
in these issues that efforts are being made to
start a bull campaign from prevailing quotations.
and il is worth noting that the conservative
houses in the Street are urging reduction OF
accounts in which the fancy priced rails figure
,rornipently The railroads cannot advance
further on their merits. though technical condl-
tions due to short selling may carry them tenn
Dorarilv higher. Old high grade mortgage issues
of the ra ilroad companies not in demand at
current prices but issues find a fair market
among investors. though of the large amount or
such securities placed on sale in June a large
proportion is still in the hands of the houses that
bought them from the bankers who underworld
them Low grade securities are much more in
favor now than at this time last year, not only
among individual investors, but among the
banks and other institutions, the Willingness or
buvers to take the cheaper priced investments
supplying trustworthy reflection of the change
that has taken place in public confidence in
the fiscal year Just ended. Investors apparently
believe that the high grade bonds have about
reached the limit of their improvement and they
therefore naturally are turning their attention to
the issues that are reasonably safe, and which
are quoted at levels that yield an attractive
income.
Hairoa ds reporting for the third week in June
and for the month Of May show marked gains
in traffic receipts, and disposition on the part
of the companies to spend larger proportion Of
gross income on operating account, this being
especially pronounced in the case of the Harri-
man roads and Pennsylvania. Railroad man
ayers are so confident of the future that they
are planning large expenditures on their prop
critics which as a rule already are in a better
state Of physical efficiency than at any time in
the history of American railroads. In trade con-
ditions ample reason is found for the optimism
among railroad men, also in the condition of
the growing crops in the West and South though
the Weld of cotton will not be So heavy this
year as it was a year ago. record breaking
corn crop is promised. Winter wheat will be
less in the total Weld than that of bumper years,
but "A mart of the deficiency viii be made up by
snrine. wheat assuming that weather conditions
in the agricultural section Of the country under
go no serious change Wheat prices doubtless
will rule ~ relatively high levels for months to
come owing 10 the small supplies left over from
las- wear and the natural increase in the demand
for consumption the latter being factor that
viii attract attention from economists.