Financial [excerpt]

The Money Market.

     Owing to the large government payments for bond purchases the New York loan market was in a much better frame of mind at the end of last week, it being known that the bank statement fell far short of reflecting the real improvement in the cash holdings of the banks. The closing of the stock market on Saturday checked any display of nervousness about Mr. McKinley’s death, and, when activity was resumed on Monday, a confident and easy tone was shown in regard to money. The purchase of further amounts of bonds was supplemented by an order issued by Secretary Gage to anticipate the payment of the government’s October interest, which would release some $5,000,000. [603] [omit] [604]

New York Stock Market.

     Wall street [sic] was prepared for the news of the late President’s death. In fact, the market had practically discounted the sad event by the declines of Thursday and Friday of last week. The Stock Exchange did not open for business last Saturday, and, though this action was taken solely as a mark of respect and a recognition of the national mourning over the loss the country had sustained, the recess enabled the financial and speculative community to regain tone. When business was resumed on Monday the street had enjoyed an opportunity to consider the situation calmly, and had reached the conclusion that there was nothing in it to justify apprehension. On the contrary, President Roosevelt’s prompt declaration that the policy of his predecessor would be his own, and that the same cabinet officers who had formed Mr. McKinley’s advisers would be retained, relieved the market from all fear of political changes. It was also appreciated that, however great the shock to the business world had been, there was nothing to diminish the prosperity the country is enjoying and nothing calculated to affect the earnings of corporations. If a disposition had existed anywhere to sell securities recklessly and in obedience to a mere “scare” it completely disappeared. Furthermore, it was realized that the money market was in a better state, and that the position of the New York banks had been materially strengthened by the payment of $8,000,000 or more from the Treasury against bond purchases at the end of the week. The definite ending of the steel-workers’ strike also had considerable effect. Large buying orders were executed in the London market on Monday morning for New York account, and British and continental interests also purchased our stocks extensively. The London quotations for Americans at the hour of the opening here on that day were accordingly considerably above Friday’s closing figures, the advance in some cases being 3 points or more. Many buying orders came in from local and out-of-town investors, a large proportion being at low prices, and evidently for people who hoped or expected the market to give way. The purchasing through commission hours at the market quotations was, however, sufficiently heavy in volume to cause advances above the London parity, and to make it unnecessary for the large interests to give the support they were undoubtedly ready to extend. The Steel stocks, while strong, were not as prominent as might have been anticipated, securities like Union Pacific, St. Paul, Southern Pacific and what are termed the Morgan stocks leading the list. There was naturally considerable realizing, and moderate reactions, attended by temporary dullness, were seen, though Monday’s market as a whole was extremely strong in tone. On Tuesday, however, after a strong opening and an advance during the morning hours, prices reacted more or less owing to realizing sales. The Treasury announced that its October interest would be anticipated, money showed increased ease, and the fall of foreign exchange rates seemed indicative of approaching gold imports. The market was, however, to some extent affected by what turned out to be unfounded reports of serious changes in the new President’s cabinet. On Wednesday it was expected that the market would be dull, owing to the suspension of business on the next day for Mr. McKinley’s funeral. This expectation was realized so far as the morning hours were concerned, the market being quiet though steady to strong in tone. In the latter part of the day the absence of weakness or of any disposition to sell appeared to alarm the short interest, which was by no means small. Covering of bear contracts was, however, supplemented by activity and strength in the Vanderbilt stocks, headed by New York Central. The movement in these securities seemed to come from inside sources, and aided in making the close on Wednesday a decidedly strong one. As the week progressed the advance in prices apparently resulted in a diminution of the outside orders, or rather in the executions of such orders. There was considerable manipulation by large interests, and the market at times seemed to be more or less under the control of such influences. It should be noted also that an idea found free expression that as the market had withstood the shock of the President’s death some of the various large deals which were understood to be under consideration will now be brought out, especially as the financial outlook is decidedly clearer. On Friday the tone was fairly strong but dull, and in the late trading some irregular concessions were shown, due to realizing.
     The settlement of the steel-workers’ strike took the form of a virtual surrender on the part of the Amalgamated Association. The advantage which this result means for the trust is not lost sight of in Wall street [sic]. At the same time, the advance in the United States Steel stocks was on the whole moderate. The common rose to 44½ and the preferred to 95, and there was good buying in both, though it seemed that the inside interests which had supported these securities from the inception of the strike and throughout the uncertainties which followed the shooting of Mr. McKinley either realized or were unwilling to bring about a decided rise until money and other conditions were decidedly favorable for a sustained upward movement.

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Bonds and Investments.

     The bond market recovered quickly this week, in sympathy with the stock list. As was noted in last Saturday’s issue of BRADSTREET’S, the fear of President McKinley’s death had little influence on prices for prime investments, though, in conjunction with the closer working of the money market, it restricted the buying demand.