New-York tribune., 1910-09-02
FINANCIAL MARKET
Banks Heavy Losers on Opera
tions with Sub Treasury.

on = lisht volume of trading stock
market nrices moved toward lower
level in the best part of the day, max
imum declines among the prominent
issues running from one to more than
+v,.o noin4s The downward movement
WAS not accompanied by investment SELL
ing or by news developments warrant
Ine tI7e nessimistic predictions heard In
Tho street over the future of business IN
this country. the selling by the profes-
eionaI element being based upon the ap-
sense of an outside demand for securl-
ties and on the poor showing IN net
.srnirers made bv the Pennsylvania and
New York Central railroads for the
month of July Most companies report
inc, lower net returns for July ended the
fiscal wear with large margin of proflt
above dividend requirements, ana the
fact that monthly statements no" COIL
ing To hand show that increased opef-
atina expenses have wiped out the cur
rent gains in gross receipts need cause
no apprehension in investment crcies,
The railroads are not increasing their
e1,andit11res at the expense of conserVa-
tive dividends. In the case of some COM
NAMES. as for instance. the Atchlson' 1t
NAV be necessary to reduce d1VloehoS'
hut such reductions merely Will renecI
the poor Judgment of directors IN ao-
vancing rates on the basis of temporary
extraordinary earnings
Wall Street appears to have made up
ITS mind that there must be general
revision in dividend disbursements. and
it has selected as its chief candldates III
the expected movement Atchlson' 81.
Paul and Union Pacific. Present prices
for the stocks named discount the posi-
biIitv of dividend reductions. The larger
number of securities dealt in on the local
exchange are cheap at prevailing quota
| lions desnite the talk to the contrary
heard in hear quarters of the specula-
tive community. Dulness in the STOCK
/ market at this period OF the year is no
! indication of unsound conditions IN the
mercantile world. and the very fact that
the larger financial interests are doing
nothing 10 encourage an active specula-
| tive movement at this particular time.
when the banks are financing the crops
and autumn mercantile requirements, IS
an impressive reflection of the SOUND
! sense of our banking interests, While II
supplies the promise of the development
of active securities markets later in the
season. Stocks closed above the lowest
| figures reported. but net losses were not
much under maximum declines.
ON their operations with the Sub
Treasury the local banks have lost up
ward Of S7000,0O0 since last Friday
night. In addition the banks nave lost
on the direct movement of currency TO
the interior a substantial sum, and 1t
| therefore is rot unlikely that saturday
! Clearing House statement viii show
material decline in cash holdings and
falling off in the reserve above legal re-
ouiren1ents unless there has been a
large contraction in loans. The banks
and trust companies are not doing an
active loan business. and as far as new
4 stock Exchange loans are concerned it
is only necessary TO note the current
light transactions in securities to re-
aliZe the extent of the current demand
for accommodation from speculative
sources. The Bank OF England shows a
satisfactory proportion of reserve to
la bility In its return for the present
week. its percentage of 5152 comparing
with a ten-year average of 1910, but
heforo the end OF September the ratio
! doubtless will, as usual, decline to a level
that will induce the governors of the
/ institution to advance the minimum rate
of discount to 3l2 or / per cent Com
nared with a week ago. the reserve
shows a decline of 100000. After early
weakness in sterling rates yesterday a
f4-Ynpr tendency developed, the upward
movement being based upon the scarcity
IF bills mere and the belief that prom
inent banking houses were buying ex-
change against stock selling orders II
the local market.