New-York tribune., 1910-10-03
FINANCIAL MARKET
Money Situation Not Favorable
to Bull Speculation.

1
the operations Of the professional ele-
ment Whatever idle capital there may
be available for investment purposes is
moving into bonds, the market for which
has shown more life in the last two
weeks than reported in several months.
both on the exchange and over bank
ers' counters. As a matter Of fact there
il not an overabundence of capital in
this country that is not tied up in our
various forms of investment, and until
cur markets are better supplied with
money there will be little chance OF sus-
tained upward movements in securities
or extreme activity in trade. Fortu-
nately our wealth producing ground
gradually is bringing about Improvement
| in this respect, bat there will have to be
a marked change in foreign trade con-
dftions In this country's favor. reduc-
| ton in the extravagant expenditures
made by Americans abroad and
greater tendency on the part Of Eu-
ropean capital TO move into our enter
trises before we can look for substan-
tial betterment in money and business.
Politics exerts a restraining influence
upon market movements, and uncertainty
over the outcome both OF the railroad
rate controversy and corporation cases
before the Supreme Court likewise tend
to retard business and speculation, but
the idea that these factors are the un-
deriving cause of the present unusual
situation is not we'll founded. The scar
city of capital and the overspeculation
in all lines following the panic of 1907 IN
the main are responsible for existing
conditions.
Money is growing dearer the world
over. and rates for accommodation are
likely to rule at higher figures for weeks
to come. In the local market the cot
ton bill of lading difficulty if not set
tied along the lines suggested by our
bankers and railroads viii cause some
temporary embarrassment, as the re-
fusaI Of London and Continental bank
crs TO accept these bills after octooer
II will compel the New York banks TO
make the advances to the Southern
hanks against shipments of cotton with
,,1t being able to realize on the billS
until the actual arrival Of the cotton In
F,Jrope. This merely will tie up credit
for a time, though il doubtless VIII
serve to make money tight at this centre
Tho Rank Of England and the Imperial
Bank Of Germany advanced their dis-
count rates TO a and per cent respec-
tivelv last week, local money market
rates were decidedly f1rmer and sterling
exchange moved against New York De-
Co.
st which gold could be exported, and
the possibility of such an operation at
time Of diminishing bank reserves Is
creating an extremely cautious policy
on the part of the banks in the matter
cf extending accommodation, but IL
should be noted that loans already are
heavily extended, and thar the extern
,,,.c Incubation that was expected ~
take place throughout the country has
not materislized. After the cessauoIi
of the demand for money in connection
with the financing Of the harvests easier
conditions doubtless will develop. and
unless there should be much larger
trade demand for funds than generally
oxnacted at present the bond market
.bo,,Id get the benefit of the return now
or currency from the interior
While exports of cotton are being made
:, fair volume, the general outward
,.e,,,en+ of merchandise IS not heavy
o,,,,,gl, to offset increasing imports as
an influence in the foreign exchange
market. and in view of the fact that we
have no credit balance abroad, our
money market cannot expect 10 secure
assistance I'm Europe this fall, except on
= regular loan basis. Indeed, the metal
may he taken from here if London should
act,aIIv need it, At this time last year
the United States was q creditor on
foreign trade account TO the extent OF
moro than $50 100000. while in the year
before the balance in our favor amounted
TO sol 100000. These figures compare
with a debit against us of almost Sl,ooo.-
600. as of September ] Of the current
wear. And that sum does not represent
the total of our obligations, which,
among other things, involve heavy
travellers expenditures abroad, enor-
NOUS rernittances by our foreign born
population TO the old country, freight
charges on goods carried in foreign yes
soils and interest and dividends due on
American securities held abroad. At the
moment there is no offsetting influence
in the way of active buying of our Sc
curities by European bankers, although
a small purchase by London bankers last
week of Union Pacific bonds encourages
the idea that the attractive prices pre-
vailing here soon may be effective in
creating a better European inquiry for
first class American issues.
The average present price of twenty
leading railroad stocks is in the neigh
borhood Of ia. and for twelve indus
trials 79 In the last week in July the
same railroad stocks made a low average
of 105.59 and the industrials low Of
7:B.6 from which levels there was an
advance to 11547 for the railroads and
TO 81 fl for the industrials on August
Ii. followed by decline by the railroads
TO 110.57 and by the industrials to 1890
in the early part Of September The
general tendency in the last two weeks
has been in the direction of higher fig
ures, but there is nothing in the char
acter OF current dealings that suggests
the start Of bull movement. There are
not few market observers who believe
that a new low level for the year will be
recorded before a sustained advance can
l,e f,rOl1Rlf wear ago tho