New-York tribune., 1909-10-06
FINANCIAL MARKETS
SH4RP BREAK IN STEEL.
General Weakness in ockS-Call
Money Rate Up to Per Cent.

United States Steel common. on enormous
transa ctions suffered yesterday its severest set
back for several months. the general list yield
ing with it. Steel common had opened fraction
ally down. responding TO a lower range of prices
in London, but had more than recovered the
slight decline when toward the close of the first
hour a heavy block of the stock was pressed Tor
sale. with the effect of breaking the price three
points within ten minutes. mass of stop loss
orders being reached and the traders rushing 70
sell and il was not until 80 had been reached
that support was given. A rally followed good
buying being evident and the shorts covering TO
some extent. and Steel had advanced to within a
point OF Mondays closing figure. the whole list
sharing in the improvement, when in the late
afternoon the marking up of the call money rate
to 6 per cent, which was accompanied by calling
of loans precipitated another break in which
Steel went below its morning record TO 80, or
more than 4 points under the highest Of the
day, and most of the other issues also made
sharp declines. The close was at around the
lowest, with Steel common at 9Ols, net loss
Of ga points. Union Pacific lost 2ss points St
Paul pa, Reading 31s and Amalgamated IA,
and there were many other net declines ranging
from fractions to points New York Central
and the Erie issues during the whole session
We're conspicuous exceptions to the general
weakness. and all closed at net advances.
An increased demand for currency for the ac-
count of the West and the South is reported at
the local banks. and indications in the domestic
exchange market suggest active movement of
money from here throughout the rest of the
week. Harvest money needs are increasing and
though interior institutions, particularly those
at the West have been able to take care of home
necessities TO a certain extent in the last fort
night, adVices from out-of-t town points suggest
the probability of heavy Withdrawals from the
East in the course of the next few weeks not
only in connection with the marketing of the
crops, but for the requirements of general bust
ness as well. Chicago bankers report an active
inquiry for money, and the September circulars
Of the banks at that centre predict much firmer
rate for accommodation at the West, while they
appear TO be convinced that the quotations for
call and time funds here will harden materially
before the end of the current month There has
been q good demand for call money in this mar
ket in the last two days. the rate rising sharply
yesterday. already noted, and better bust
ness in the time department, borrowers finding
i'm last Saturdays Clearing House statement
adequate reason for providing themselves with
time accommodation AT prevailing rates, which
from all known factors in the situation governing
loan quotations will not he at a cheaper level in
the rest of the present year. out town banks
that have made advances here on stock market
commitments are calling loans which are being
taken by the city institutions and as the
reserves Of the trust companies only S4.50O-
600 above the legal Is per cent level il is not
unlikely that the local banks will be compelled
in the near future to finance some OF the loans
recently shifted 10 the trust companies, despite
the low position Of the Clearing House surplus
According to the last Clearing House statement
the banks and trust companies together had a
reserve of only $6,l00000.
There is reason for uneasineSs over the
outward movement of money. it merely repre-
sents the expanding business activities of the
country. but while this outflow is in progress il
will be a difficult matter To finance "A big bull
speculation in Wall Street There are signs of
an active distribution of stocks by important
market interests, and from information received
Yesterday from representative commission
house securities are being taken by a class of
traders who will not be able to protect their
accounts i'm the event Of "A declining level Of
prices Bull markets run along for time
ia q period Of high rates for money but i'm the
mast they always have been followed by severe
declines and the reaccumulation OF stocks at
cheaper quotations by the people who always ire
willing to let some one else have their holdings
At the tail end of a bull speculation IT, however
the market can be kept within legitimate bounds
in the time OF advancing money rates there
should be no extensive decline there is moth
ing in the outside situation that warrants bear
campaign. At the moment there is an almost
total absence OF investment operations, but In
vestment houses believe that with any lowering
Of Stock Exchange values active demand will
develop. especially after the interior require
ments have been satisfied and return move
ment Of cusrency sets in In some quarters the
idea Is hed that tho federal Treasury will be
compelled 10 issue short term certificates before
long in order 10 increase its working balance
which now stands at s32.2i5.O00 exclusive Of
government deposits in national banks hut In
increase that is going on in the national revenues