New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1910-01-01
STOCKS AND MONEY
19O9'S IMPROVEMENT.
Years Record IN. Finance and
Business Shoes Prosperity.

With the interruption of only temporary
setbacks. prices for stocks in the year just
closed advanced to higher levels In
general upward movement that reflected
complete restoration of confidence in BUSH
ness and financial circles and actual i'm
provement in the country's industries far
greater than the most sanguine observer
was willing to predict on January l. 1909
In 1908 stocks began to discount the re-
turn of normal times in money and bust
ness. Operations on this basis continued
in 1909 to an extent that carried quotations
for most issues to a level that not only
fully measured intrinsic worth, but in
many instances to point that overvalued
the merit of investments so far as their
attractiveness to new buyers was con-
cerned. And 1t was owing to this con-
stantly advancing tendency that invest
ment operations on the Stock Exchange
reached small proportions in the second
half Of the year, though the rise en-
couraged optimism in business quarters
and induced active speculation on bor-
rowed funds.
Cliques and combinations formed for the
express purpose Of advancing prices for
speculative profits were more important
factors in stock market trading than the
public demand, while the same thing was
true of the character of the operations
in the commodity markets, in which specu-
lation proceeded at furious pace in ut
ter disregard of underlying and control
ling facts. Advancing prices and specu-
lation invariably accompany growing
trade. but in the last year both prices and
speculation ran at racehorse speed that
was checked TO only a small extent in
|
serves and higher rates for loan accommo-
dation, brought about by the increased
movement of money into business chan
nels High prices for stocks and COM
nodities so far, however. have failed to
discourage speculative buying. Better
quotations for stocks, cotton and grain
are talked of for the new year and for
cotton, which sold in 1909 at the highest
level since the Sully speculation of 10000,
the prediction is freely made in Cotton
Exchange circles that its quotation will
reach 20 cents a pound in 1910. because the
crop harvested was we'll below the eXtraor-
binary yield Of the preceding year. spec
uiators ignoring the fact that each addi-
ton to price means a reduction in con-
sumptive demand.
Stock Exchange houses are quite gen.
orally agreed that the so-called public
has not been in the stock market to any
large extent in the last twelve months.
The professional and professional ele-
ment and the banks and other financial
institutions have made the advance, and
they are now ready to welcome any further
rise, upon which, doubtless, they will take
| their profits. Indeed. in the early autumn
financial concerns converted heavy hold
ings bought at cheap prices into cash
in ay16S
and to take advantage of the higher cost
of money. and it is not unlikely that in
1910 quotations for securities will be
adjusted to lower levels as a consequence
of liquidation, though before a movement
of this sort develops current holders doubt
less will be able to dispose Of their ac
counts at better figures than those now
prevailing. At the moment there is little
upon which a bear campaign may be
based, but certain conditions appear to be
developing that contain elements of dis
tinctly unfavorable character. In conserV-
alive circles there is some apprehension
concerning the strain that is being placed
upon credit as result Of an enormous
demand upon capital for business and
speculative purposes, and in the same quar-
tiers the threatened broad demand for in
creased wages, as consequence of the
high cost or living, ana the tendency
among the railroads to encourage the
theory that higher rates justified by
current conditions cause disquiet.
Our financial institutions in many in
stances helped the advance in stock market
prices in the last eighteen months by the
direct purchase of securities and by the
freedom exercised in granting accom-
mediation to speculative operations. Until
the last few months money rates were
at a low level-that is, from the time that
bank holdings began to increase following
the panic of 1907-and in that period
| financial concerns practically were COM
PEELED to invest their surplus funds in
securities in order to earn return on their
deposits, changing their investments from
| time to time by realizing on those that
showed handsome profits and reinvesting in
| other issues that were in line for improve
ment. In the loan account of the Clear
| ing House banks investments are included,
| and comparing the loans of the banks and
| trust companies at the present time with
those at the opening of 1907 an increase of