New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1910-07-06
FINANCIAL MARKET
Decline in Bank Reserves Points
to Hiqher Money Rates.

Sharp declines were recorded in yester-
days stock market, prices for the larger
number of active issues showing maxi
mum losses Of from , TO 4 points, Anal
gamated Copper. American Shelters,
Reading. Union Pacific and United
States Steel exhi biting the chief weak
ness. Speculation was made up chiefly
Of the operations Of the bear party,
which found IN Saturdays bank state
ment and adverse reports from the aSrl-
cultural section Of the country adequate
reason for operating for lower quota
tons. In addition TO the factors named,
sales We're made on the argument that
the death of Chief Justice Fuller. of the
United States Supreme Court. would in
volve q further postponement OF de-
cisions in the American Tobacco, Stand
ard Oil and corporation tax cases now
before that tribunal It may be well To
bear in mind in connection with the ap-
pointment of a successor to the late jus
tfce Fuller. and q possible successor TO
Justice MOODY. that President Taft Is 4
most conservative man, and that the
men he brings TO the Supreme Court
bench TO fill vacancies will be men
versed in the law that protects all in
1erests. The extent Of the decline forced
further liquidation Of accounts that We're
carried over in last weeks break. but
there was no evidence of investment
selling except in cases where market
conditions made the raising Of cash i'm
perative Reports from the spring
wheat belt We're uufavorable. and the
fact that prices for wheat options showed
marked strength while corn acted in
sympathy naturally induced heavy pro-
fessional selling pressure in stocks,
which were bought on the decline by the
strongest banking interests in the Street
The day viii come when stock market
prices viii advance. and al that time
present buyers will reap the usual har-
vest that comes 10 buyers at bargain
levels. In the late afternoon prices were
stronger, under the influence Of covering
Of shorts, bur there was no indication
that The decline had run its course.
Reading made a new record for the year
in the early dealings.
According TO The opinion Of the best
informed interests in the financial com
munity money rates gradually will work
toward = higher level The statement of
the Clearing House banks for last week
was extremely unfavorable, showing al
most a record breaking loss in cash and
reserve holdings. while in spite Of the
heavy liquidation OF loans against spec
ularive commitments the loan item actu-
ally increased u q substantial extent
Il was generally expected that the heavy
decline IL stock market prices would be
reflected IN a material contraction in
loans. but apparently the forced selling
Of securities compelled the larger bank
ing interests 10 call upon the banks for
tremendous amount of money to
finance their operations Much Of the
stock sold Was taken over TO prevent de
noTalizaTion on the exchange ana
whenever market conditions are salts
factory the stock thus absorbed will be
put out and the loans against Il will be
lQuidated. The reserves Of the associ-
ated banks, according 10 last weeks
Clearing House statement, are under
S9p00pO, compared with more than
S2J,0UO01O 4 Week ago. owing To the
fact that the interior demand for money
in connection with crop moving purposes
has 5egga earlier this year than usual,
il is quite likely thu, borrowers soon VIII
be compelled % pr a higher rate for &C
con-modatIor- Fortunately. conditions
IL ,he foreign exchange market suggest
the probability % god imports il the
autumn
The demand rate for sterling exchange
is now more than Two cents under the
L sci prevailing 81 this time Il year ago.
and unless there should be q radical
change il The factors governing the
course u the International money mar
kcts the United States should he able in
the fall 10 bring In enough OF the
precious metal TO prevent acute disturb
ance in our monetary sltua ton. This
view Of Tie outlook is based on the Well
founded theory that our export trade
Will increase. that We viii have Il large
surplus Of domestic products To send to
Europe and that money rates in Lon