New-York tribune., 1910-10-21
FINANCIAL MARKET
Bank of England Advances Dis
count Rate to 5 Per Cent

The Bank of England advanced its
minimum rate Of discount yesterday
from To . per cent, caH money in Lon
don was stronger. the India Council
called loans. open market discounts 81
the British capital were harder and
English cnusol= declined 80 the lowest
level since October. 1S47. In the local
money market there was no material
change in loan quotations but sterling
exchange moved TO a materially higher
range under the influence Of the Bank
~ England rate. the opening figures
showing a gain Of from p to 30 points,
as compared with the closing in
Wednesdays operations. Demand ster-
ling was rot far from the gold export
ing level, and in foreign banking circles
r. was thought that IN the event Of con
tiuued demand upon London for gold
situation would develop that would force
s17iDrnenrs Of the metal from New York
The prospect Of such . movement Was
An effective factor in cooling bull en-
th11siasrr ou the local Stock Exchange
I'm the early dealings. while II tended -
strengthen the confidence Of newly
created bear party in the theory that
sf The moment stocks were a better sale
than = purchase as far as speculative
operations were concerned. FurtheT~
more the latest developments IN the in
7e-na-ional money market were re
sronsibIe IN the initial transactions for
the liquidation Of \ large number of
marginal accounts accumulated az higher
prices. In the subseueut trading. how
ever. the bull element was successful
in bringing about better range Of
prices
Advances IN the afternoon were large
enough 10 Offset early losses. and In
the case Of the prominent issues and
some Of the specialties substantial net
Gains were shown at the close. especially
in the case Of the Hartman shares.
American Smelling Reading and United
States Steel the upward movement IN
the last named being accompanied by a
report that in spite Of the inactivity OF
the steel trade IN recent months the
holders Of the common stock would re
ceive an extra dividend or the result Of
the current years operations While II
WAS announced at the time OF the ad-
vance in the dividend rate Of this stock
10 q 3 per cent basis that in the future
all dividends in excess Of . per cent
would be in the form Of extra dividends.
well informed interests stated yester-
cav that i was not probable that an
extra disbursement would be made on
the results Of 1910, owing 10 the fact
that the corporation would use large
percentage of its surplus earnings for
new. construction purposes. The United
States Steel Corporation Is a splendidly
managed concern, and il is not likely
that the directors viii depart from their
conservative policy which involves the
upbuilding OF their property regardless
OF Wall Street demands for increased
dividend distributions. Just now the
corporation is not operating in excess
of So per cent Of its capacity. and al
though current indications suggest that
earnings viii increase before the end
Of the year as a consequence Of heavier
orders from the railroads, it is absurd
10 count upon bigger dividends IN the
Immediate future Both the common
and preferred stock Of the United States
Steel Corporation. however. are on
dividend basis that warrants their pur-
chase for investment account.
The recent advance in the Bank Of
England rate from 10 4 per cent was
based upon the increasing Withdrawals !
Of gold from the institution for ship /
ment 10 foreign countries, chiefly Egypt |
That advance failed TO check the out
ward movement OF the metal. and in 1
some quarters IL was thought yesterday 4
that a still higher rate than the per 1
cent just established would be declared /
before the strain on the British Banks /
resources could be checked. especially Is /
u was reported that India had taken /
an additional 100000 gold in spite OF |
the stronger discount, with EI,0000 600 |
professionally engaged for Egypt II is /
quite probable that in order 10 protect |
its own holdings the Imperial Bank OF /
Germany will increase its discount rate
while the known attitude Of the Bank OF /
France and its power 70 keep its gold /