The sun., 1916-11-28
FINANCIAL NEWS
AND COMMENT
Prices Slump on Slaekened
Demand, U-Boat Reports
and Higher Money.
INVESTORS ARE BUYERS
Steel Common Sells at a New
Record, but Closes With a
Two Point Loss.
INVESTORS ARE BUYERS

When buying power becomes exhausted
in any market II II an easy matter to
bring about lower prices, particularly
when there are man. speculative &C.
counts accumulated at top figures on bor-
rowed money. And In the case Of the stock
market It Is not dificult. as was shown In
yesterdays operations, to force out bull
accounts when aggressive demand ceases
and when rates on loans move to a
higher level or when spectators for the
decline frighten out weak holders on the
circulation Of rumors calculated to de-
press the spirits Of the ordinary outside
operator.
Professional traders yesterday worked
for cheaper quotations on the basis Of
absence OF active inquiry for stocks,
using the reported presence Of C-boats
near our waters as the stick to force the
small people out OF their holdings. And
they were ably assisted in their efforts
by an advance in call money rates and
the calling In various instances OF loans
against stock market accounts.
Call none advanced TO 5i2 per cent.
the highest quotation since July 10 last
when II touched 6 per cent. The upward
movement In rates did nc harm except to
speculative holdings. while perhaps II
was a blessing in disguise. rs II GER
tainly acted as a curb to excessive spec.
ulation and expansion. Temporarily
raising money rates in a period OF wild
speculative excitement Is a good thing
although It may hurt the pocketbooks Of
overextended stock market bulls. and In
the present instance II does not suggest
that there is not an ample supply OF
money on hand for all legitimate require
ments or that the market Is running into
a position Of permanently etin loan quo
tations.
Bankers are OF the opinion that there
Is nc justification for the idea put forth
In certain quarters OF Wall street that
either speculation or regular business OPP
erations are to be forced into a situa.
ton of CONTRACTION because OF the
strength in money last week and yes
terday. There Is a big excess Of sur
plus bank funds in the country above
legal requirements, the last statement
Of the Comptroller OF the Currency plac-
ing the amount beyond the total re-
quired by law at more than $500. 000. 900.
such a sum would make possible an
expansion in credit BY several billions
Of dollars.
Furthermore II should be borne In
mind hat the ~rediscounting benefits OF
the Federal reserve system have hardly
been touched and that large shipments
Of gold are yet TO be made to this coun-
try for the purpose Of paying for Amerl-
can merchandise sent by our exporters
to the Allies.
More than $1,000 900 gold was re-
ceived from Canada yesterday, and in
some quarters II was believed that be-
tween now and the M Of the year as
much As $4,000. 900 Of the precious
metal would be sent to the United States.
Money rates advanced because OF Sat
urday's relatively unfavorable bank
statement IN respect OF excess reserve.
The loss In reserve was brought about
through a decrease in cash based chiefly
upo Federal reserve collections. but the
actual factors in the situation were not
considered by stock market spectators
who sold their shares as prices moved
to lower levels. Saturdays bank state
ment afforded the banks an opportunity
TO advance rates. and incidentally &c
strengthen the position OF the securities
market.
Investment selling was not reported
and on the decline good buying was
Eoted. although no attempt was made e
Ts ' ''N 'O'A "" tAotl itlois
than ! to more more than 3 points
among the active issues following earl,
strength which accompanied the eXecu
ton o. an accumulation OF over Sunda,
buying orders. With the completion O
this early movement for public accoun.
new buying power failed to develop. an,
professionals naturally began to hamme,
the list and to talk undersea boat activ!
ties and to put out runors OF peace IL
Europe. while they suddenly found caus,
Tor alarm In the money market.
United states Steel common sold to &
new high record In the initial trarsac
Ions. but closed at a net loss Of NOR,
thar ? points. while practically the entir,
list OF indus;rlals. especially stocks rep,
iesenting companies either directly o
Indirectly identified with the manufac
ture OF munitions OF war were weak II
The best part OF the session, Firm spot!
were found among the rails. Reading
FOR instance. closing fractionally highe
and Union Pacific only Is down.
Exchange OH Germany declined to tn,
lowest rate recorded since the war be